Bonus question - what is the answer?

Posted by Charlie Duff in Strategies, Managing people, Pay & benefits on Thu, 05/11/2009 - 18:10
  • HR, especially in the financial sector, needs to be more inventive when it comes to incentives
  • Bonuses should incentivise but not encourage unstable behaviour and risk taking
  • Are we entering a new era of better talent management and incentives?

With the news this week that RBS, the failed bank at the heart of the banking crisis, is to be heavily reinvested in by the Government to the tune of £39m, there remains much speculation over the future of bonuses. Stephen Overell of The Work Foundation spoke to Charlie Duff about the situation.

 

Money has been a traditional renumeration and motivation tool in the financial sector: could it face a life without bonuses? And will we shortly see an end to monetary bonuses, not just in finance, but across sectors?

Bonuses exist in almost all sectors to help motivate and incentivise performance. They're used as a reward, for example, the annual Christmas bonus given in many industries to say 'thank you' to a worker.There's nothing essentially wrong with this as Stephen Overell, associate director of The Work Foundation, explained: "The Christmas bonus is part of the basis of a good deal at work and it often has a role in incentivising people."

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