Workers Choose Bonus Over Raise Every Time

Would you work harder if you got a raise, or a bonus?  Believe it or not, a new study shows that most people will only do it for a bonus.

It's easy to see why.  Raises are something we expect.  Bonuses are gifts that, sometimes, come out of nowhere.  According to Tyler Falk at smartplanet.com, it's bonuses or unexpected cash gifts that motivate people to work harder.

“We attribute this to the salience of the gift: It was obvious to them that we didn’t have to give this additional compensation, but that we had chosen to,” said Deepak Malhotra, a co-author of the study and professor at Harvard Business School, told the Harvard Gazette, Falk notes. “[The gift] signaled that we had done something nice for them which they may want to reciprocate.”

"The. . . advantage of a bonus or gift instead of a raise is that a raise is permanent and becomes routine," Tony Mayo quotes Christopher Hsee, a professor at the Booth School of Business, in his blog. "The employee gets accustomed to that level of income and there is no going back for the employer. Worse still, you continue laying out the money each month but the employee no longer sees it as recognition or motivating. An unscheduled bonus is boost to happiness every time."

But there are downsides to bonuses -- or rather, working for one, according to Max Goldman at blogs.successfactors. com.  He quotes on employee, "Sorry but bonus < raise in this employee’s mind. I’ve been screwed out of too many bonuses because of the under-performance of a company that had nothing to do with my personal performance. Because the sales department couldn’t get their act together, any effort I put out had no impact.”

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