You're designing your bonus structure wrong.
And it's costing you more than money - it's teaching your team that doing their actual job is optional.
Here's what I see everywhere: Bonus plans that reward people for... doing what they're already paid to do.
"Great news! You'll get a bonus for hitting your sales targets!" (Isn't that literally your job?)
"Exciting bonus opportunity for completing your key projects on time!" (What were we paying you for exactly?)
"Special incentive for demonstrating our company values!" (So without the bonus, you'd ignore our values?)
This isn't performance management. This is paying people twice for the same work.
The Fundamental Confusion
Your salary pays people to do their job well. Period.
Their job description, outcome profile, key responsibilities - that's what their paycheck covers. If they can't do those things competently, you don't need a bonus structure. You need a different person.
Bonuses should reward what you want MORE of, not what you expect as standard.
What Bonuses Should Actually Reward
Going Above and Beyond: The extra mile they didn't have to take
Innovation: The idea that improved something for everyone
Leadership: Mentoring others, taking initiative on team projects
Problem Solving: Fixing things that weren't technically their problem
Referral Generation: Introducing a new qualified prospect to the firm that converts to revenue
Notice none of these are "completing your assigned work competently." That's called having a job.
The Dangerous Message You're Sending
When you bonus people for doing their regular responsibilities, you're accidentally teaching them that:
- Basic job performance is bonus-worthy (it's not)
- Without extra pay, they should do less (they shouldn't)
- Their salary doesn't actually cover their full role (it should)
- You don't expect excellence as standard (you should)
The Real-World Disaster
I've seen this play out too many times. Companies that bonus people for meeting basic expectations end up with teams who:
- Negotiate bonuses for everything
- Underperform when bonuses aren't available
- View their job description as "suggestions" rather than requirements
- Expect extra compensation for standard work quality
You've created a culture where people get paid to show up, then paid again to actually do the job.
How to Fix Your Bonus Structure
- Step 1 - Define "Standard Performance": What should every person in this role accomplish for their regular salary? That's your baseline. That's what they're already paid for.
- Step 2 - Identify "Above Standard": What behaviors or outcomes would you love to see more of? What would make someone exceptional, not just adequate?
- Step 3 - Bonus the Gap: Create incentives for the exceptional stuff, not the expected stuff.
Examples of Bonuses That Actually Work
Instead of: "Bonus for completing your quarterly goals"
Try: "Bonus for exceeding quarterly goals by 15%"
Instead of: "Incentive for good customer service"
Try: "Bonus for customer referrals or testimonials you generate"
Instead of: "Bonus for attending all team meetings"
Try: "Bonus for training 2+ new team members to full productivity"
See the difference? One rewards doing the job. The other rewards excelling at it.
The Psychological Shift
When you stop bonusing people for standard performance, something magical happens:
- They stop viewing their job description as negotiable
- They understand what's expected vs. what's exceptional
- They take pride in standard excellence rather than expecting rewards for it
- They get genuinely excited about earning bonuses through real achievement
Your Bonus Audit
Look at your current bonus structure and ask:
- Are we paying people extra to do what they're already paid to do?
- Would someone performing at standard level earn these bonuses?
- Do our bonuses encourage behavior beyond job requirements?
- Are we rewarding excellence or just competence?
The Bottom Line
Your salary budget pays for job performance. Your bonus budget should pay for exceptional performance.
If you're using bonuses to motivate people to do their basic job, you've got the wrong people or the wrong expectations.
P.S. - If you just realized you're bonusing people for things that should be standard performance, don't panic. Just reset expectations clearly: "Going forward, bonuses will be for exceptional performance beyond your role requirements." Your best people will love the clarity. Your mediocre people will reveal themselves quickly. Both outcomes help you build a better team.
P.P.S. - Look, this stuff I write about? I can actually help you fix it. If anything ever resonates to the point where you feel the pain and don't know what to do about it, give me a call. That's literally what we do - turn these business headaches into business advantages.
Keep going!
Sel
