Let’s start with a story. A few years ago I was working in a start-up, the company had just started, and we were working on the first ever product. There were hundreds of bugs and performance issues, the server was crashing every few minutes, the website had significant issues in older browsers and the technology framework we were using had almost no documentation.
We were just a small team of 3 developers, the first developers of the company. Hiring was extremely difficult, and many times we had to work 12 or 13 hours per day. We didn’t had any process. Feature request was done by the founder, jumping to my desk every morning, requesting something new, sometimes contradictive to what he asked a day before. On top of all these, we had a deadline! We had to finish the first product of the company by mid-October.
Despite all these problems we managed to have a somewhat working beta version of the first product. Many bugs, many issues, but at least we had something. …And that was the moment where the management believed that we are ready to launch. They organized a small PR event, invited a few journalists and received a pretty positive feedback. Everyone was excited, everyone apart from us, the developers. We knew that there were problems, we new that as soon as there is significant traffic on the website, the server will crash. We knew that the technology that the management(!) chose to build the product was not stable enough for our use-case.
Mid-November the founder came to our room, he had an announcement, “If you manage to finish the second product by the end of the year, you will get a bonus of 600€“. Christmas was around the corner and the company believed that this is the perfect moment to push for marketing and have new product out.
We couldn’t believe in our ears. How does he think that this is even close to possible? The second product, was 10x more complicated that the first one, and we hadn’t even fix the hundreds of bugs we have. We hadn’t manage to hire anyone, apart from a freelancer who was working 3 days per week.
We said that we will do our best. It was not the bonus, 600€ is not a life-changing amount of money, and in Germany you have 50% tax on it, it was nothing. We said that we will do our best mostly because we wanted the company to succeed, and we were too proud to admit that we will not be able to meet the deadline.
Of-course we failed. The second product was launched 4 months later. We were tired, on burnout.
Why I am telling you this story? Because I deeply believe that bonuses as a way of increasing motivation, do not work. Compensation does not bring motivation. Healthy environments, normal working hours, supportive people, company vision. These can bring motivation.
Most of the times, when the management promises bonuses to achieve the impossible, the teams become cynical, and less motivated. The people feel that the management exhorting them, or at least do not understand them. It feels that the management is pushing them to do the impossible, instead of helping them to make the task possible.
Think of the case of blood donation. You do it, not because you have a benefit out of it, but because you believe that it does good to society. You do it for the satisfaction of contributing to something great. If someone starts giving you 5€ every time you give blood, in reality transforms an act of solidarity to a transaction, and removes all the joy of doing it. You will probably do it less often, not more.
The exact same thing happens when someone gives you money to work more or harder. If your job, is something you love, if you care and you are emotionally invested in it, you don’t see it as just a necessity for getting paid, you don’t see it as a transaction of exchanging labor for money. If you believe in the vision of the company, you work harder or better because you are emotionally attached to it, not for the sake of a bonus.
Another problem with bonuses is that when people get used to them, they start working for them. If there is not a bonus attached to a goal, they start feeling that the goal is not important, and try less harder towards achieving it.
Don’t get me wrong, I am not saying that employers should never give bonuses, but maybe they should do it for other reasons, not as a way to increase motivation, e.g. to reward loyalty or as a form of appreciation. Of course if you don’t get paid fairly, a bonus can be a significant help, but it is not a long term solution.
Motivation is the art of getting people to do what you want them to do because they want to do it. - Eisenhower