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Destructive bonuses

February 4, 2007 by Artem Marchenko

Many if not most of software development companies employ some kind of the bonus plan for their developers. Developers or teams get a set of targets to reach and depending on the target fulfillment the bonus is paid. The idea of compensating the extraordinary performance and success is a good one. Unfortunately there two major problems with the bonus plans:

Expected bonus is not a reward

As Joel Spolsky puts it "They [bonus plans]'ve become like tips in restaurants: everyone expects one, so they can no longer be used well to award performance". Most of the good managers I've heard of try to plan the bonus targets so that their subordinates would get about the same amount of money whatever happens.At the time when there is a reasonable lack of programmers everywhere, it is just too dangerous to have an employee that expected the bonus, but didn't get it. The received bonus feels like something expected, while the one that was not received feels like a punishment and most of bosses wouldn't like their employees to feel punished.

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