The business bonus culture has come in for a lot of criticism recently, with many people seeing the idea of massive bonuses unattractive. Well their comments could be written off as irrelevant – it is hard to imagine the head of a large company suddenly feeling the scales drop from his eyes, and believe that he is corroding the moral fibre of guilt with the bonuses being paid to employees. He/She is more likely to take another sip of champagne!
Now that tough economic times are here, I believe more could be said against the award of bonuses. It is all very well handing out massive pay-packets to individuals who bring home the bacon in the boom years. However, when things start to go belly up, then the focus should change.
Many organisations have built up a culture over the recent years where they have concentrated on rewarding their top performing employees, whilst assuming that this was enough to keep the bottom line looking healthy. In reality this approach filtered through the company, and consquently did not prepare them for the tough economic times. The bonus culture creates a psychology of expectation. Employees soon start to expect a bonus even when the company had an average year.
My perspective on how organisations manage their performance, suggests that they are more focused on the reward system and not enough on accountability. The bonus culture leads to employees becoming complacent and in many instances get away with sub-standard performance. The reality is organisations are not getting the best out of their employees. They need to hold people to account for both good performance and bad.
The solution is a lot more complicated than identifying the staff members who are slowing the business down and handing them their work termination notices. Employers need to be clear on targets which employees have to achieve. They also need to clearly understand what constitutes success and what constitute failure.
At the end of the day, it all comes down to good leadership. The leaders drive accountability and the actions of their staff. Leaders also create the right environment for high performance. Employers must ensure managers are equipped to do the job that is required of them, that staff are absolutely clear what is required of them and that accountability is happening. Times are changing. Businesses will have to find new ways to motivate staff. If an employee keeps refusing to support you, let them go; or you will wish you had. Continual learning is essential for future growth.