Tuesday, April 7, 2009

Big Bonus = Poor Performance

-- NOTE: Post taken from The Smart Supervisor, a blog for front line supervisors --

Yesterday on Marketplace I heard some fascinating new research that shows excessively large bonuses are associated with poorer performance. The researcher noted that higher at-risk compensation motivates us (the desired effect) but also acts as a stressor (an undesirable effect). At a certain point, huge bonuses create more stress than motivation resulting in poorer performance.

This research adds to a growing body of empirical evidence supporting what smart supervisors have known all along: people don't leave, stay, or work hard because of money. Employees are retained and motivated by the vision the leader casts, the accountability the leader creates, the responsibility the leader gives, and the empowerment the employees feel. We are entering a period of time in which soft skills will be far more critical than hard skills. Or as Tom Peters puts it, "'soft' is the new 'hard'". So work on your soft skills, especially listening and communicating.

Check out the full Marketplace report. The researcher sounds a bit like Dr. Nick on the Simpsons.

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