Bonuses--Not Raises--Boost Employee Performance
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Bosses hoping to motivate employees to work harder may want to trade merit-based raises for performance-based bonuses, suggests a Cornell University study.
The four-year study which tracked more than 700 workers found that a 1 percent increase in pay generally led to a 2 percent increase in performance. A lump-sum pay-for-performance bonus of the same amount, meanwhile, inspired employees to improve performance by an average of 15 percent. "Making a strong link between pay and performance worked with bonuses, but it did not work with pay rises," [study author professor Michael Sturman] said.Read more: Bonuses 'better than a pay rise' ABSTRACT: Using Your Pay System to Improve Employees' Performance: How You Pay Makes a Difference SHARE:
Posted In: Stress & Coping | Tags: Employees | Bosses | Motivation | Money | Posted by FindCounseling.com Staff on December 15, 2006 at 10:54 AM | Permalink |
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