Bonuses

Over at the New York Times, a group of analysts are debating the end of the bonus culture on Wall Street. While some of their conversation centers around the specific culture of the financial industry and the problems with using taxpayer money to pay bonuses rather than return companies to viability, some of it questions the viability of bonuses as a driver of performance.

The scales of federal bonuses and private-sector ones are completely different. Even the biggest federal bonuses don't catapult their recipients into the ranks of the wealthiest Americans, but they do make differences in their recipients standards of living. In corporate America, bonuses are a large part of executive compensation, but the people who receive them already make an extremely large amount of money. Does it really become an incentive under those circumstances? And what if it's not really performance-dependent? As one of the debaters writes:

"However, when a bonus is not only expected but mandated under any circumstance, it ceases to be a bonus. It becomes an outrage. Same goes for perks."