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Separating Performance from Bonuses

Separating Performance from Bonuses

Posted: 29th November 2019

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  • #4528

      <p><br data-mce-bogus=”1″></p>
      We are radically overhauling our performance management – scrapping ratings in favour of regular adult to adult conversations. One of our challenges is that bonus has always been tied to the dreaded ratings. I have 2 options I am considering:

      1. Give managers a pot of money and let them award it
      2. Scrapping bonuses completely

      All of this is a complete 180 for us – I’m delighted as have wanted to do it for a while – but would welcome feedback from people who have been through this journey and any pitfalls or recommendations?


        Hi Maggie

        In our experience, most companies are NOT getting rid of bonuses (despite the evidence that they don’t improve performance and can lead to negative behaviours). Most companies have just moved the bonus award to line manager discretion.

        Good luck with what you decide!



          Thank you!


            I don’t think you have to scrap bonuses in order to move to regular adult to adult conversations.  We scrapped the performance review process a few years ago and moved to a very light regular review process (which seems to work very well), but annually we do run a performance calibration process where teams will agree performance scores which lead into the bonus payment.

            Getting managers away from the idea that individual performance is still paramount and must be recognised with a bonus is not easy, but splitting it like this has allowed us to start having quite a different conversation about bonuses and how best to use them for the benefit of the company.

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