Recognize This! – Bonuses generate entitlement, not the behaviors and results you want.

I’m on record with my opinion that cash-based rewards, particularly end-of-year bonuses, are a bad way to drive desired behaviors and actions year-round.

Just one reason why this is true is people quickly begin to see their bonus as an entitlement – something they expect to receive every year (and in fact come to rely on as they would base compensation).

An example of this entitlement nature that truly takes the biscuit comes to us from the UK:

Quotation

“Bankers will sue if their employee rewards are not large enough this year, lawyers are warning.

“A number of ‘disgruntled’ bankers will not accept bonuses that are lower than usual, legal experts warned, according to the Daily Telegraph.”

To be pedantic, the definition of bonus is “Something given or paid in addition to what is usual or expected.” Once people start suing to get something that is not supposed to be an expected entitlement, then clearly we can only conclude that the bonus idea has gone completely off the rails – especially in the world of banking and high finance.

And really, is anyone happy with the bankers of the world in today’s economy?

My CEO, Eric Mosley, recently had an article in Forbes on this topic: “Is It Time to Ditch the Annual Bonus in Favor of Recognition Programs?” Eric offers five quick tips on how to rethink bonuses to do what you most need – year-round reinforcement of great work and behaviors that demonstrate your values.

Give Eric’s article a read, then come back and tell me – do you think it’s time to ditch bonuses (before the entitlement gets even more out of control)? What would you do (or want) instead?