COMPANIES pay bonuses for all sorts of reasons. One is to link salaries to profits to help keep wage bills down in bad years. Another, of course, is to make people work harder. It is for this last reason that governments have introduced performance-related pay for many of their employees over the past 30 years.
Yet as our feature shows, paying for results doesn’t always boost performance. In fact it can make it worse.
The problem runs far deeper than the practical difficulties of measuring performance and the ill will that such schemes can create. Contrary to…
