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The bonus should motivate the employee to reach the challenging goals. The financial crisis and the recession showed, the bonus does not have to motivate automatically. It can pretty easily de-motivate the employee when there is a clear mismatch between the goals and the reality.

The progress of the recession was quick, that the goals did not reflect the reality, but they were constructed on the too optimistic expectations of the top management about the growth of the market and the organization. The employees felt happy for few months, but they discovered quickly the unreal targets.

The unreal targets do not motivate to work harder, to reach higher goals. They just motivate to not to work as the employee has no additional income from any effort, because everything stays below the target given.

The management has to encourage the managers to adjust the goals, but the management has to keep the goals financially secure, which is not an easy tasks. The organization has to secure its cashflow and too soft goals can be a real damage.

Many organization showed a lot of the creativity in the adjustments of the goals as the employees can feel the organization cares about their personal income. The creativity will be paid in the spring 2010.

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Written by Luke

November 8th, 2009 at 11:43 am

Posted in Compensation

Tagged with bonus, Compensation, motivation

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