The general sentiment in this thread seems to be that bonuses are bad for morale in the long term, because people start to feel entitled to them. It's interesti

The general sentiment in this thread seems to be that bonuses are bad for morale in the long term, because people start to feel entitled to them. It's interesting to look at this from the side of the employer for a second. You want to do right by your people (you know, if you're not a complete arsehole). Hopefully you pay them well. But revenue isn't always easy to predict, and once you give someone a raise, you can't take it away again (at least not easily). So you can't pay people excessive amounts all of the time, because the money might not be there all of the time. Of course the effect of a single large bonus (annually or one-off) is much greater than 1/12th of that same amount tacked on every month. On top of that, some bonus plans can have tax benefits (though I suspect this widely differs between countries etc). Bonuses seem like a pretty good way of paying people what you'd like to pay them, but without the risk of it bankrupting you. I'm a little bit torn when it comes to bonus amounts, however. Some companies give everyone the same bonus. Or perhaps everyone within the same department or job category. This is nice from a "we're all in the same boat"-perspective. But it ignores the reality that some employees do much more valuable work than others (I'm sure there's a fancy pareto-like name for that, but I don't remember it). On the other hand, it might encourage some employees to "go above and beyond" in a way that's unhealthy.