More and more companies offer performance bonuses be it in the form of cash rewards or other incentives like a share of the company's stock. When looking for potential jobs, having a generous performance bonus program could be a huge plus for companies at least in the point of view of jobseekers.
The additional money from performance bonuses is certainly a huge incentive as it can help out with employees' monetary need. As the name suggests, performance bonuses are based on how much effort employees give to the company. Most of the time, determining the size of performance bonuses would depend on qualitative and quantitative metrics that direct managers or supervisors give to the employees.
In an effort to secure a higher performance bonus, employees would tend to work harder than they normally would without the promised incentive. While this suggests that the scheme is effective in the company's point of view, a study shows that performance bonuses might actually be harmful to employees, Ask Men reported.
It is not hard to see why the promise of monetary and/or stock incentive could actually hurt employees. Those who are aiming for large performance bonuses would usually exert too much effort and give the company too many hours in order to show to their direct managers that they are working hard.
Civilized reported that aside from being potentially harmful to employees' health, performance bonuses could also strain relationships among managers and colleagues. The competition is such that it can actually result in office dramas where employees would try to discredit one another in front of their bosses. Jobs & Hire previously reported that toxic bosses could also harm employees' mental health.
Although the study found that performance bonuses could lead to exhaustion and drive a wedge between colleagues and managers, getting rid of the scheme will not be an easy decision for companies. At the end of the day, jobseekers would always go to the companies that pay more.