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Since you don't agree with the ethical side, think about it this way: if you're not known in the industry for paying bonuses for successful projects and inventi

Since you don't agree with the ethical side, think about it this way: if you're not known in the industry for paying bonuses for successful projects and inventions, why should any brilliant engineer look forward to work for you? Not to mention that there will be no motivation among your employees to perform more than the absolute minimum work required to keep their job. Consider whether you would like to own 80% of a failing company or 30% of a widely successful one.

Xylakant 8y ago
> Not to mention that there will be no motivation among your employees to perform more than the absolute minimum work required to keep their job. If that is the reason you pay a bonus, then you already lost. People will just do the minimum required to achieve he bonus requirements and will not keep the companies interest in mind. I’ve seen places where people prioritized stuff that was no longer in the companies interest, but made them eligible for a bonus. You could just as well fold the bonus into the fixed salary and be better off in most cases.
- tssva 8y ago
  If the requirements to acheive their bonus isn't aligned with the best interests of the company that is a failure of the company and not the employee.
  - Xylakant 8y ago
    It’s practically impossible to guarantee the alignment unless the bonus is a flat out share of the profits or paid after an employee has performed in an extraordinary fashion without any pre-written bonus agreement. But any kind of variable payment agreement might be in perfect alignment with the companies goals at its inception by runs a substantial risk of loosing the alignment over time. Company goals change over time. It’s totally ok if you feel like a bonus should be paid to an employee for achieving something special, but if your employees do not go beyond the bare minimum that keeps them their job, you’re in a kind of trouble that a bonus payment cannot fix.
  - cuddlypsycho 8y ago
    That is what we have stock options for .. to align the best (longterm) interests of the company and the employees. It is much better vehicle to build value for both parties than a bonus culture.
    - mmt 8y ago
      I agree that's what stock options are for, but I disagree that, in practice, they have that effect. I think it's important to differentiate between a "meanginful" share of the company and stock options in general. For the average engineer, joining after employee #10 where founder allocated 10% to an ever-diluting option pool, that doesn't seem likely. Perhaps public companies' profit-sharing plans are closer to the mark, except that an individual employee is so much less likely to have the power to "move the needle" on profit that even that's questionable.
cuddlypsycho 8y ago
"no motivation among your employees to perform more than the absolute minimum work required to keep their job" There is a great body of research suggesting quite the opposite actually. Beyond a certain level of compensation, offering more money does not correlate with better productivity or creativity at all. Those who are satisfied with doing the absolute minimum to keep a 9-5 job are not suddenly turned into great inventors if offered more money. I have often found that the most valuable engineers are their absolute worst critic when it comes to quality of work and work ethics. They would put in their absolute best even if they were doing something for free/opensource.
- barrkel 8y ago
  A sense of ownership makes a material difference to me, and it must be material ownership for it to count. Relative compensation is also important - if I'm not being paid well relative to others, that can destroy my motivation. Great inventors won't stay at a job doing 9-5 work, of course. Treat people as levers, and good people will leave.
- kittiepryde 8y ago
  Does research also set c-suite salaries too?
- mmt 8y ago
  > Those who are satisfied with doing the absolute minimum to keep a 9-5 job are not suddenly turned into great inventors if offered more money. That may be true, but that doesn't mean the converse isn't true, which is what's being alleged here, that a great inventor can be turned into an absolute-minimum employee when given insufficient reward. More specifically, I think you're conflating the typical "inventives" that employers use (which I what I believe the studies have been about) with credit, respect, and/or an ownership stake. Even the article has a quote about it being not about the money. > They would put in their absolute best even if they were doing something for free/opensource. I'm speculating here, but I would expect that would change if they had to do that contribution under someone else's name, especially if that someone else were a manager and not an engineer.

Xylakant 8y ago

> Not to mention that there will be no motivation among your employees to perform more than the absolute minimum work required to keep their job. If that is the reason you pay a bonus, then you already lost. People will just do the minimum required to achieve he bonus requirements and will not keep the companies interest in mind. I’ve seen places where people prioritized stuff that was no longer in the companies interest, but made them eligible for a bonus. You could just as well fold the bonus into the fixed salary and be better off in most cases.

tssva 8y ago
If the requirements to acheive their bonus isn't aligned with the best interests of the company that is a failure of the company and not the employee.
- Xylakant 8y ago
  It’s practically impossible to guarantee the alignment unless the bonus is a flat out share of the profits or paid after an employee has performed in an extraordinary fashion without any pre-written bonus agreement. But any kind of variable payment agreement might be in perfect alignment with the companies goals at its inception by runs a substantial risk of loosing the alignment over time. Company goals change over time. It’s totally ok if you feel like a bonus should be paid to an employee for achieving something special, but if your employees do not go beyond the bare minimum that keeps them their job, you’re in a kind of trouble that a bonus payment cannot fix.
- cuddlypsycho 8y ago
  That is what we have stock options for .. to align the best (longterm) interests of the company and the employees. It is much better vehicle to build value for both parties than a bonus culture.
  - mmt 8y ago
    I agree that's what stock options are for, but I disagree that, in practice, they have that effect. I think it's important to differentiate between a "meanginful" share of the company and stock options in general. For the average engineer, joining after employee #10 where founder allocated 10% to an ever-diluting option pool, that doesn't seem likely. Perhaps public companies' profit-sharing plans are closer to the mark, except that an individual employee is so much less likely to have the power to "move the needle" on profit that even that's questionable.

cuddlypsycho 8y ago

"no motivation among your employees to perform more than the absolute minimum work required to keep their job" There is a great body of research suggesting quite the opposite actually. Beyond a certain level of compensation, offering more money does not correlate with better productivity or creativity at all. Those who are satisfied with doing the absolute minimum to keep a 9-5 job are not suddenly turned into great inventors if offered more money. I have often found that the most valuable engineers are their absolute worst critic when it comes to quality of work and work ethics. They would put in their absolute best even if they were doing something for free/opensource.

barrkel 8y ago
A sense of ownership makes a material difference to me, and it must be material ownership for it to count. Relative compensation is also important - if I'm not being paid well relative to others, that can destroy my motivation. Great inventors won't stay at a job doing 9-5 work, of course. Treat people as levers, and good people will leave.
kittiepryde 8y ago
Does research also set c-suite salaries too?
mmt 8y ago
> Those who are satisfied with doing the absolute minimum to keep a 9-5 job are not suddenly turned into great inventors if offered more money. That may be true, but that doesn't mean the converse isn't true, which is what's being alleged here, that a great inventor can be turned into an absolute-minimum employee when given insufficient reward. More specifically, I think you're conflating the typical "inventives" that employers use (which I what I believe the studies have been about) with credit, respect, and/or an ownership stake. Even the article has a quote about it being not about the money. > They would put in their absolute best even if they were doing something for free/opensource. I'm speculating here, but I would expect that would change if they had to do that contribution under someone else's name, especially if that someone else were a manager and not an engineer.