When an employee opens an email titled ‘Your Bonus Statement’, anticipation runs high. However, does the actual bonus match the reward envisioned? Bonuses are often seen as a recognition for hard work and commitment, a tangible acknowledgment of effort. While bonuses can boost morale and motivation, they also carry a psychological catch: expectations versus reality.
Research shows that bonuses can catalyse increased effort, but when they fall short of expectations, it can lead to dissatisfaction. Employees often view bonuses not only as financial rewards but as a reflection of their value to the organisation. A bonus perceived as inadequate or unfair can harm morale, cause burnout, bring down trust in management, and foster resentment among colleagues. This phenomenon, known as the 'contrast effect', explains how employee’s expectations – based on verbal praise, past payouts, or industry benchmarks – can make a lower-than-anticipated bonus feel like a loss, even if it is objectively generous.
In collectivist cultures like Malaysia, bonuses are often viewed as communal rewards. Employees may use bonuses to support their extended families, which increases the emotional significance of the payout. In contrast, in individualistic cultures such as the United States, bonuses are typically seen as personal achievements, where fairness and transparency in allocation is crucial. While bonuses can boost short-term productivity, if they are seen as inconsistent or tied to unrealistic targets, they can undermine long-term performance.
Some employees experience a 'bonus hangover', where motivation spikes during bonus season but dips significantly afterward. This cycle can hinder sustainable performance and creativity. Moreover, when bonuses become the primary focus, intrinsic motivation – driven by meaningful or enjoyable work – may diminish. Employees may start asking, 'What’s in it for me?' rather than 'How can I contribute to the organisation’s success?'
