Bonus Plans

Paper Summary:

Employers are constantly looking for ways to attract qualified employees, and bonus plans have been a driving force in the business world. In recent years, the consequences of such plans have been carefully scrutinized. This paper examines some of the consequences that companies face when they make a decision to implement bonus plans. The discussion focuses on steps that can be taken to avoid the negative consequences of bonus plans, which include animosity among workers, lower productivity, and poor employee loyalty.

From the Paper:

"The article, "Bonus Plans: Why Most fail" explains that one of the best ways to avoid the negative consequences of bonus plans is to simply offer a fair wage. (Porter 2003) The author argues that the consequences associated with bonus plans could be eliminated if employers offered a living wage that is higher than that of similar companies in the same community. (Porter 2003) The author contends that offering a living wage coupled with holding employees accountable for their performance, will create the benefits that a bonus plan offers while avoiding the consequences that bonus plans present. (Porter 2003)"

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