BONUSES CAN BACKFIRE
Summary:
The case study discusses about the cons or disadvantages
of bonuses. It also discusses how bonuses may reduce
employees intrinsic motivation in their work and how it may
lead to the misbehaviour of workers. Thus finding an
appropriate way to provide bonuses and rewards which in turn
increases the desired behaviour of employees has become a
real issue for the management.
Facts:
● According to this case study, increasing rewards may
decrease the interest in the rewarded task. This is
proved by the survey conducted on children by Mark
Lepper of Stanford University.
● Psychologist Edward Deci states , “ Once you start
making people’s rewards dependent on outcomes
rather than behaviours, the evidence is people will take
the shortest route to those outcomes.”
● Hence the fact that rewards may also lead to
misbehaviour by the worker is proved by the survey
conducted on the factory workers.
● In this survey, the workers are rewarded based on the
quantity of goods produced by them hence the quality
is ignored. So they might even engage in illegal or
unethical behaviour to get rewards.
BONUSES CAN BACKFIRE
Problems:
● Although rewards are motivating employees to do work
but they reduce employees intrinsic in the task they are
doing.
● Increasing rewards can decrease interest in rewarded
task.
● Rewards may lead to misbehaviour by workers.
● Rewards make the people to take the shortest route to
complete the task which is not effective.
● The shortest route to complete the given task might even
engage the employees in illegal or unethical behaviour.
● It is also seen that repetitive tasks will lose their intrinsic
motivation if the task is rewarded.
● The real issue for managers is finding an appropriate way
to reward behaviours so that desired behaviour is
increased while less-desired behaviour is reduced.
Questions and answers
1. Do you think that, as a manager, you would use
bonuses regularly? Why or why not?
A. If I were a manager, I would definitely use bonuses but
not regularly as bonuses motivate and encourage
employees. It also increases employee’s self-esteem, job
satisfaction, efficiency and commitment towards their
job and the company. Providing bonus regularly may
lose its charm and importance and it may eventually
BONUSES CAN BACKFIRE
leads to a situation where employees will not work
unless the bonuses are given.
2. Can you think of a time in your life when being
evaluated and rewarded on a specific goal lead you to
engage in negative or unproductive behaviour?
A. Generally anyone may get demotivated by the rewards
once in a life time. For example, if any task is assigned to
us, we may sometimes find shortcuts to complete such
tasks which may lead to losing the interest in the task or
losing the intrinsic motivation. Hence rewarding may
sometimes leads to negative or unproductive behaviour.
3. Do you think providing group bonuses instead of
individual bonuses would be more effective or less
effective? Why?
A. Group bonuses will have both positive and negative
effects.
The positive effects are every person in the group will get
same rewards and there will be no discrimination which
avoids jealousy or envy among group members. Also, it
will increase group productivity and coherence. The
negative effect is group bonuses can be less effective as it
may lead to injustice. For example, one group member may
be more hard working than the other and he may be under-
rewarded in case of group based rewards. Also, one
member, who does not work enough may be over-rewarded
than the other.
BONUSES CAN BACKFIRE
4. How would you design a bonus/reward program to
avoid the problems mentioned in this case?
A. A reward program must be designed in such a way that it
must reward those employees who work for company goals
and their performance must contribute to fulfill the
organisation’s objective. In order to avoid the problems
mentioned in this case, intrinsic motivation must be given
to the employees so that they do not lose interest in the
task. The management must make sure that employee’s
performance has actually improved after rewarding
employees which reduces the decrease in back fire.
