Preview

Organizational Behavior

Better Essays
Open Document
Open Document
1021 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Organizational Behavior
CASE INCIDENT 3: BONUSES CAN BACKFIRE

Bonuses are really significant for all managers and employees. Bonus is a sum of money added to a person’s wages for good performance. It is a way of rewarding the employees’ work. That is why it is a significant way to get a good performance from employees.

Bonuses might have both negative and positive effects on employees. The managers should know how to give bonuses. There are some sensitive facts that managers should implement. For instance, an employee should get a bonus as a consequence of really hard work. If an employee do the regular work which s/he should do as a routine, it is not necessary to give him or her a bonus. Bonuses also should be distributed fairly. As an employee getting more bonuses than his or her manager is not a fair distribution. It should be in balance with employees’ seniority. If it is not in balance, it might be harmful for the company and it also might destroy the equation in the organization. This can cause a negative and unproductive effect in the employees.

Generally it is important for companies to be in harmony with all employees. Most of the time group works are more useful for a company than individual works. That is why rewarding a group is more important than rewarding an individual. Success of a group has a bigger effect to the organization then success of an individual because an individual maybe cannot carry an organization to a better position. However, a group might do it. If a manager gives bonus to a group, every single individual who are the members of the group might work for the company’s benefit as more productive than past.

As a manager, people should use bonuses regularly in a company, because there are many advantages to use bonuses. Bonuses are often connected directly to performance, such as generating more sales or motivating a production line to meet or exceed a quota. It is well known that there is a tangible financial reward for increasing

You May Also Find These Documents Helpful

  • Powerful Essays

    Rwt1 Evaluation Paper

    • 2748 Words
    • 11 Pages

    Bonus plans can cover anyone from upper management to lower workers on the production side of the business. There are many studies on them and they have mixed reviews. Bonus Plans offer a wide variety of options that can be somewhat tailored to the company that they are implemented in.…

    • 2748 Words
    • 11 Pages
    Powerful Essays
  • Better Essays

    Engstrom Case Report

    • 957 Words
    • 1 Page

    months, employees began to perceive this bonus as a part of their regular compensation, and any…

    • 957 Words
    • 1 Page
    Better Essays
  • Better Essays

    Bonuses are a wonderful thing to show appreciation to the employees and their families; there is no doubt in that matter what so ever. It becomes an issue when the bonuses/pay increases awarded are out of the company’s financial means. The company should take the amount they are able to set aside and compare to the amount of employees that are employed. This amount should change as the amount of profit that the company acquires changes. If the company is not having a good financial income then the bonus amount should drop or not be given. Bonuses are not a mandatory requirement for the company to provide unless a legal contract has been signed. This is a benefit/privilege that a company can offer in appreciation to one’s work and dedication to the company.…

    • 1582 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    Can be a power tool to keep employees motivated and engaged as bonuses are given only for the period in which good performance occurs, and good performance must be repeated each year in…

    • 258 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    them want to keep striving for more and become a great asset to the organization. As a health…

    • 759 Words
    • 4 Pages
    Good Essays
  • Good Essays

    3.When the bonus is tied to the short-run earnings of the manager’s firm, then the bonus declines even if the manager did everything he or she could do in the midst of an economic downturn. Accordingly, bonus pay should relate to the performance of other comparable companies for a longer period to remove any incentive to boost short-term cash flows at the expense of long-term profitability. The bonus is designed for mangers that exceed their industry averages over the last several years.…

    • 1094 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    It is important in every organization big or small that everyone has the ability to make sure all departmental managers are on the same page. Especially with a downsized company, this can really hurt those who have had issues with bad employees versus good employees. There are difficult facts to make sure that we all keep an open perspective when a company downsizes. Giving employees bonuses during this type of a difficult situation is good because this allows you to make a peaceful profit for the employee to stay while downsizing staff. Sometimes if you downsize a large staff and people get cut, this can become an intimidating situation and those who are staying should feel more…

    • 1438 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Withe the limitation of the bonuses,the negative effects of the high bonuses present above can be significantly reduced. And the limitation on bonus can makes the leading function of salary become more obvious and effective. This helps the financial institutions do better in company management and risk control.…

    • 680 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Motivation Concepts

    • 1098 Words
    • 5 Pages

    These types of incentives allow people to do well and behave in a favorable manner. Once people see that they are appreciated they become a lot easier to work with and the productivity will definitely increase. Increasing the productivity level will be reflective within the entire department and all will look good due to the group effort. Positive…

    • 1098 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    We know that incentives and awards are some of the factors that motivate employees, and it is true that by nature we say that people get paid for doing their jobs and even sometimes we forget to thank them, that is why it is so important that we have a good incentive program in place because people do respond well to incentives for good performance, recognition and doing especially good work.…

    • 889 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    • We infer there is an economy-wide recession during the time period of this case.…

    • 946 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    MBA 540 Discussion 16

    • 667 Words
    • 3 Pages

    One of the main reasons why teams fail is because there are misalignments between the reward and performance evaluation systems, and also the decision making process. Brickley, Smith & Zimmerman (2009), note that “team production effects make evaluating the performance of individual team members quite complicated” (p.506). When firms fail to align their performance evaluation systems with the rewards structure, teams can become dysfunctional. For example, a team may be paid 100 per cent of their bonus based on the total number of units of a particular product that the team, as a whole, produces. While this is a typical structure in many firms, if a firm fails to align the performance evaluation system with the rewards system, several issues such as free-rider problems can arise.…

    • 667 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Pay for Performance

    • 1107 Words
    • 5 Pages

    Most managers get short-term bonuses and long-term incentives in addition to salary.50 For firms offering short-term incentive plans, virtually all 96% provide those incentives in cash. For those offering long-term incentive plans, about 48% offer stock options. These aim to motivate and reward management for long-term corporate growth in shareholder value. The size of the bonus (in terms of percentage of salary) is usually greater for top-level executives (Dessler). Often times top level management incentives are just a bit too much. They are given large stock options, cash bonuses, and other high price incentives and often times they take advantage of the situation. Enron executives are a great example of taking advantage of a good thing. This is just one down fall of the incentive program, another issue would be employee moral decrease because they often times feels like management should not receive such large rewards…

    • 1107 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Human Resources at Kpmg

    • 541 Words
    • 3 Pages

    The main arguments against monetary rewards are: 1) employees may cease to perform activities if they are not compensated for doing them and 2) monetary rewards decrease the intrinsic motivation. The main argument for monetary rewards is that monetary rewards provide a goal for employees to work toward. If they know that they will receive a bonus for excellent performance, then they may work harder. I don’t think that KPMG should continue to give bonuses. It may create inequity for the people who feel they are under rewarded. Also, there may be some disparity amongst the people who do not receive any bonuses and those that do. Additionally, it may create a hostile work environment where employees are always striving to be better than others, rather than part of a team.…

    • 541 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Positive Accounting Theory

    • 2419 Words
    • 10 Pages

    The bonus plan hypothesis is that managers of firms with bonus plans are more likely to use accounting methods that increase current period reported income. Such selection presumably increase the present value of bonuses if the compensation committee of the board of directors does not adjust to the method chosen…

    • 2419 Words
    • 10 Pages
    Better Essays