Bonuses for performance vs no bonuses - Essay Example

On the contrary, I will assert in this paper that with the right attention to detail in the planning and implementation processes, the incentives that bonus pays offer will positively affect employee performance and that “increasing labor costs make your cooperative more competitive” (Vogt, 1995). I must clarify that the argument that the implementation of bonuses can encourage positive performance in employees is based on a well thought out bonus plan as the mere introduction of a bonus payout, without any regard for meticulous goal setting and research, may result to failure.

The study conducted by Dan Ariely (2008) and his three colleagues prove this as they found, through an experiment wherein promise of payments were made for the participants to complete a series of cognitive tasks, that “the offer of a higher bonus led to poorer performance” (Ariely, 2008). They also found that participants who wanted to excel performed worse as the pressure got to them (Ariely, 2008). Thus, I must emphasize that before a bonus plan is implemented, the employers must first establish a clear objective and the nature and frequency of the bonus pay (PeopleMatters, 2004).

These must also be clearly communicated to the employers (PeopleMatters, 2004). Furthermore, a comprehensive employee research must aso be conducted in order to ascertain whether the percentage of the effectiveness of the payout is high—this should take into consideration the stress and pressure factor that Ariely found to be an obstruction brought about by the participants pressuring themselves to excel in order to get the cash payout. Also, a time allowance must be made in order for the employees to attain substantial improvement (Canada, 2000).

The positive results are not in any way claimed to be instantaneous. In this way, the risk for failure is minimized. Having clarified my premise, I will then discuss in the next section the evidences that strengthen the argument of this