Performance Based Pay: The Illusion of Motivation

Performance Based Pay: The Illusion of Motivation
Rather than relying solely on incentives and performance bonuses, organisations should focus on creating a supportive work environment that fosters intrinsic motivation and a sense of purpose.

Can you believe that Silicon Valley Bank employees received bonuses hours before government takeover as reported by CNBC? To understand the significance of this event, it is important to first understand the context in which it occurred. SVB is a prominent player in the tech industry, providing banking services to many startups and technology companies. Considering the current fall out, SVB is under the control of regulators in the US. (Recent news is that HSBC acquires SVB). However, just hours before the takeover were announced, SVB issued bonuses to its employees. This move has been criticized as being ethically questionable, as it suggests that the bank’s priorities were not focused on its clients or shareholders, but rather on its own employees. It also means that executives thought that performance targets were achieved in 2022. How is it possible that a bank is on the verge of closure and employees get a bonus? The performance bonus system itself is questionable.

There are past examples of global companies, where performance bonus and incentives spoiled the...

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Vinod Bidwaik

is currently working with AP Globale & Sakal Media Group as a Group Director-HR. He is a global HR and management thought leader with more than 25 years of experience in HR with 20 years of leadership experience in big Indian and Multinationals industries. He has authored books in Marathi and English languages on career, life science and HR management. Vinod is featured among "Top Agile Leaders 2021", recipient of the prestigious Asia Pacific HRM Leadership Award 2014, Vibrant Gaurav Puraskar 2016 Pune HR leader 2017, HR professional of the year. He is among 101 Top HR Minds 2019 declared by World HRD Congress.

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Vinod Bidwaik

is currently working with AP Globale & Sakal Media Group as a Group Director-HR. He is a global HR and management thought leader with more than 25 years of experience in HR with 20 years of leadership experience in big Indian and Multinationals industries. He has authored books in Marathi and English languages on career, life science and HR management. Vinod is featured among "Top Agile Leaders 2021", recipient of the prestigious Asia Pacific HRM Leadership Award 2014, Vibrant Gaurav Puraskar 2016 Pune HR leader 2017, HR professional of the year. He is among 101 Top HR Minds 2019 declared by World HRD Congress.

March 2024

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