Bonus  culture has become the subject of many studies nowadays. Many people have been angered by the way some bankers and high officials seem to have been rewarded for failure. Others find the idea of offering many-million-dollar bonuses morally disgusting. But few have asked whether performance-related bonuses really do improve performance. The answer seems so obvious that even to ask the question can appear ridiculous. Indeed, in spite of all the complaints about them, financial encouragements continue to be introduced in more and more areas, from healthcare and public services to teaching and universities. So it may come as a shock to many to learn that paying for results can actually make people perform badly in many circumstances, and that the more you pay, the worse they perform. No one is arguing that bonuses can help companies and institutions attract and keep the best staff. Nor does anyone argue against the idea that you can encourage people to do specific tasks by linking payments to those tasks. Rather, the point is about how to get the best out of people. Do employees really perform better if you promise to pay them more for getting results? There are some obvious reasons why such payments can fail. It has been argued, for instance, that cash bonuses contributed to the financial crash, because traders had little enthusiasm to make sure that their companies enjoyed long-term survival. Most bonus projects are poorly designed, says Professor Malcolm Higgs. He thinks the reason is that organizations try to keep bonus arrangements simple. Nevertheless, he thinks bonus projects can work as long as they link the interests of individual employees with the long-term goals of a business. Bonuses can also encourage cheating. "Once you start making people's rewards dependent on outcomes rather than behaviors, the evidence is people will do whatever they can to get those outcomes," says Professor Edward Deci. "In many cases the high officials simply lied and cheated to make the stock   price go up so they got huge bonuses." But the work of Deci and others suggests the problem with bonuses runs far deeper than poor design or cheating. In 1971, he asked students to solve puzzles, with some receiving cash prizes for doing well and others getting nothing. Deci found those offered cash were less likely to keep working on puzzles after they had done enough to get paid. These studies suggest that offering rewards can stop people doing things for the pure joy of it. This was the basis for a series of books by Kohn in which he argues that rewarding children, students and workers with grades, scholarships and other "bribes"   leads to low-quality work in the long run. Those who believe in the power of bonuses fail to distinguish between inner drive and outside pressure -- wanting to do something because you like it for itself in contrast to doing something because you want the reward, Kohn says. "It's not just that these two are different, it's often that the more you reward people for doing something, the more their inner drive tends to decline." A "do this and get that" approach might improve performance in the short term, but over longer periods it will always fail, Kohn says. People who receive bonus will naturally play safe, become less creative, cooperate less and feel less valued, he adds. What's more, the studies also suggest that offering rewards can also stop people taking responsibility. Which of the following do you think the author would most probably agree with?
Companies should make their bonus projects simple. The benefit of bonus helps to get the best out of people. The biggest problem with bonus is it creates cheating. Bonus offering can stop people doing things for pure joy.