Provision of incentives
In the last couple of years, multiple companies have been utilizing short-term incentives to serve as a motivator for the administration and to form goals and objectives as they lay down a common aspiration for the companies’ departments. Besides, short-term incentives are considered essential in the process of attracting and maintaining qualified managers (Adamson, 2017). Conspicuously, any incentive initiative is planned to augment the organization’s profits by rousing employees and also evaluating the manager. Notably, whenever an incentive initiative is appropriately premeditated and meets its rationale, it often benefits the company as profits ought to boost.
Recently, the end-of-year bonuses have been considered short-term incentives for employees to only think about the short term. The reason for this is that a bonus ought to be rewarded barely when its reimbursement meets some demand inside the company. Besides, the payment of the bonus will either improve worth or avert the annihilation of value in the company. The sturdier the connection with comprehensible accomplishment, the better the impact and the worth attained will be (Westerman & Strandberg, 2009). End-of-year bonuses usually offered short-term motivation to its employees since the rewarding process entailed the employee’s recital for the preceding year. Conversely, this event did not provide any encouragement for future-oriented happenings, but it merely relied on a short term basis.
In conclusion, it is quite evident to articulate that the end-of-year bonuses prompted employees to lose focus on the significant long term aspects of a particular company. Majority of the companies in the past used to ensure there is an establishment of performance measures in the commencement of every year. Boldly, the company would utilize these performance measures to come to the end of the year, gauge the employee’s performance and regulate their end-of-year bonuses.
References
Adamson, J. (2017). Long Term Growth Efforts: Pressures, Incentives, and Outcomes. Incentives and Outcomes. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957731
Westerman, I., & Strandberg, E. (2009). Why do public companies use short-term incentives?: A qualitative study of Boliden, Nordea, Johnson & Johnson, Q-Med, and Siemens. Retrieved from http://www.diva-portal.org/smash/record.jsf?pid=diva2:291756