Why Work Harder When You’ll Get a Bonus Anyway?

by Miranda Marquit · 6 comments

It’s been a frustrating couple of years; my husband works hard, only to have difficulty finding a full-time job. This frustration was once again brought to the front this summer, when he was passed over for a job because his union-required pay (based on his experience) was higher than the budget for the position. It’s maddening to be the best candidate for a job — and then to not get it.

I recently read an article on MarketWatch that only confirms this reality. According to the article by Quentin Fottrell, a recent study indicates that 25% of managers in North America will give bonuses even to the worst performers on their payrolls. The study also indicates that some top performers don’t get bonuses, even though they work hard and probably “deserve” them.

Between golden parachutes for CEOs that fail miserably, and the propensity to hire lesser candidates just to save a few thousand dollars a year, it’s becoming increasingly clear to those that “follow the rules” that hard work and good performance may not pay off.

Why Do Poor Performers Get Rewarded?

In the case of bonuses, says the MarketWatch article, many managers just don’t want to deal with the discomfort and effort that comes with a negative performance review. Rather than try to justify not giving a bonus, it’s often easier just to give the bonus.

Besides, who decides what constitutes “good” performance? In some professions, it’s difficult to quantify performance in a way that reflects what bonus a worker “should” receive. Trying to come up with that kind of measure can be as difficult as explaining why someone doesn’t qualify for a bonus.

What’s the Impact?

The MarketWatch article points out that rewarding poor performers can cause problems down the road. First of all, it can be bad from a business sense. By rewarding those that aren’t pulling their weight, you simply encourage more of that behavior. Why should you work harder if you’ll get a bonus anyway? It’s something of a mismanagement of resources to reward under-achievers with bonuses.

Another issue is morale. My husband is seeing this first-hand. It’s hard when you’re told, flat-out, that you’re the best candidate, but that you aren’t going to be hired. In a traditional business setting, top performers can feel unappreciated when they see their less-awesome counterparts rewarded just as well. What’s even more difficult is that the current employment climate makes it hard to simply move to a better job. Top performers can take a hit to morale just from the situation.

If the employment situation improves, though, there could be some hope for those who work hard and try to excel. My husband hopes that budgets will loosen up a bit in the next year or so, and that he can be in the running for jobs — without fear that he has to be paid too much. And top performers at firms that reward poor performance with bonuses can move on to places where their talents and hard work are acknowledged.

What do you think of performance bonuses? Do you ever feel like you’re working too hard for the rewards you’re getting?

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{ read the comments below or add one }

  • Property Marbella says:

    Reward and bonuses will be given only to those who have achieved predetermined objectives and requirements otherwise there is no point in the bonus system.

  • Jack @ Enwealthen says:

    The real question is why work at all.

    It’s a given that we need money to survive, but I’m slowly but surely fighting my lifetime of conditioning to trade my time for money. As long as you’re doing that, you will never break out of the cycle of never having enough time, and never having enough money.

    I have no problem investing as much time as necessary to get the result I want. However, I’d much rather invest my time in something that will make me money without my attention and time – be it a business, investment property, etc.

    Just a shame I didn’t learn this before I spent my 20s in the high tech 80-100 hr work week grist mill, scrambling after that winning lottery ticket of an IPO.

  • Christine says:

    My job has performance based bonuses that the manager couldn’t change if he wanted to. It’s nice to know that my hard work is being rewarded and no one who underperforms is getting a bonus just because the manager feels bad about saying no.

  • Stuart@DailyMoneyBucket says:

    Performance bonuses are becoming more and more popular as they allow employers to keep their employment costs flexible.

    However, looking at what other people are being paid is a first-class ticket to discontentment.

    Forget about what other people are paid and keep asking yourself the core question; “Am I satisfied with the amount I get paid for the skills and effort that I bring to the position?”

    If not, start searching for a place which recognizes what you have to offer and rewards you adequately.

  • Debt Blag says:

    I like to think I work hard because I’m proud of the quality of work I produce. Sure, doing good work for the sake of it hasn’t always given me the most money, but it’s the sort of thing I’ll never regret doing.

    • KM says:

      It depends on how bonuses are given out. I believe in working hard and producing quality work to be proud of (I used to have a not-so-great relationship with one of my coworkers because his half-ass attitude was not in line with my perfectionism), but I used to work at a place where “hard work” was considered to be working extreme overtime (60-70+ hours per week), being at the office on weekends, etc. That behavior was praised, and even though I received a couple of small bonuses for being at the office past 7pm on a few occasions, it was more suited towards the single, child-less employees, which was unfair. Then I realized that I will work my butt off and do amazing, efficient work in my 40 hours, but it’s worth more to me to leave on time as often as possible and forgo the bonuses if I had to. No bonus is worth missing your child grow up or your marriage falling apart.

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