Poll: Do you think cash bonuses for staff actually work?
Some argue that they don’t make workers more productive.
THERE WAS MUCH debate last week over Finance Minister Paschal Donohoe’s decision to review bankers’ pay.
Since the financial crash, government restrictions cap bankers’ pay at €500,000 per annum with no bonus. Donohoe said the restrictions won’t be removed but a review will be set up to examine bankers’ salaries.
Commenting on the announcement, Taoiseach Leo Varadkar said he believes the most “appropriate way” to reward private-sector workers is through incentives like share option schemes rather than salary top-ups.
Businesses offer cash bonuses as an incentive for workers to hit certain targets and increase productivity. They’re also a useful cost-cutting tool for bad financial years: it’s easier to scrap bonuses than it is to cut salaries.
However, UCD professor of management Niamh Brennan told RTÉ’s Marian Finucane show that she believes bonuses – for all workers, not just bankers – “don’t work, full stop” because they’re a distraction.
Meanwhile Financial Times columnist Andrew Hill wrote last year that the impact of cash bonuses is short-lived because employees start to think of them as a “permanent part of their compensation” rather than an incentive to lift performance.
With that in mind, we’re asking Fora readers this week: Do you think cash bonuses for staff actually work?
