Nhóm 3 - Bonuses and Incentives

NGÂN HÀNG NHÀ NƯỚC VIỆT NAM BỘ GIÁO DỤC VÀ ĐÀO TẠO
TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP.HỒ CHÍ MINH

KHOA QUẢN TRỊ KINH DOANH
TIỂU LUẬN
MÔN: TIẾNG ANH CHUYÊN NGÀNH
QUẢN TRỊ KINH DOANH
Đề tài:
BONUSES AND INCENTIVES
Nhóm:
TP. Hồ Chí Minh, tháng 03 năm 2024

1. Definition
- Bonus: is the decision to pay one, a group or all employees, based on criteria decided by
management to reward past achievements, milestone for the organization.
- Incentives: pay is the payment that is tied to the achievement of specific objectives that
have been pre-determined and communicated to the employees that are on the plan.
 Forms of bonuses and incentives:
- Financial rewards: cash, commissions, performance-based bonus, profit sharing, stock.
- Non-financial rewards: Additional vacation days; gifts; commendation, certificates of

merit; Promotion opportunities; Improved work environment
 Advantages and disadvantages of bonuses and incentives:

*Advantages:
- Motivation and drive: When rewarded with bonuses or perks, employees feel
recognized and incentivized to put in extra effort.
- Retention of talent: Bonuses and incentives are crucial parts of employee welfare
policies. When they feel recognized and given opportunities for additional rewards, they
are more likely to stay and not switch to other companies.
- Enhanced performance: The anticipation of receiving bonuses and incentives can

enhance employee performance. They have higher motivation to complete tasks
efficiently to meet targets and qualify for rewards.
- Promoting personal development: Bonus and incentive programs can also be designed
to encourage personal development and skill transfer. Opportunities such as learning,
training, or involvement in special projects can be provided as rewards.
*Disadvantages:
- Financial costs: Implementing bonus and incentive programs requires significant

financial resources, potentially straining budgets and profitability.
- Inequity and jealousy: Unequal distribution of bonuses and incentives can lead to
jealousy and conflict among employees, especially if criteria are unclear or biased.
- Short-term focus: Bonus and incentive programs may overly focus on short-term
results, detracting from long-term development and overall employee satisfaction.
- Dependency risks: Employees may become overly dependent on bonuses and

incentives, diminishing intrinsic motivation and commitment to their work.
2. Situation:
For a prolonged period, Company A has implemented an ill-conceived policy regarding

bonuses and incentives. Instead of evaluating and rewarding employees based on their
actual performance and contributions, the company seems to focus solely on specific
criteria that do not fully reflect the employees' dedication. The result of this policy is a
tense and unjust working environment. Employees feel unrecognized for the work they
have done. They feel lacking in encouragement and support to further develop and
contribute. Instead, they become lethargic, demotivated, and lacking in drive. Many
employees have begun to lose faith in the company and no longer wish to work actively.
3. Situation analysis:
There are some reasons lead to this problem in the company.
Firstly, the main reason is about departmental bias. Company bonus and incentives focus
only on certain departments or divisions, while ignoring or limiting others. This creates
unfairness and causes dissatisfaction and frustration among employees.
The next reason is about subjective evaluation. The company lacks clear and objective
evaluation criteria to determine bonus and incentives. Instead, based on specific
measurable results, bonus and incentive decisions are based on personal receipt or owner
ownership by the manager. This make employee lose the motivation to work.
Last but not least, it is non-transparency in bonus criteria. The company does not clearly
communicate the criteria for evaluating and distributing bonuses, causing non-
transparency and loss of employee trust. Without understanding how bonuses are
distributed, employees may feel unfair and unsure of how to achieve the bonus and
incentives.
4. Consequence:
The consequences of this issue are significant and multifaceted. Firstly, the morale and
motivation of employees plummet as they feel undervalued and unappreciated for their
efforts. This leads to decreased productivity and efficiency within the company as
employees lack the drive to perform at their best. Additionally, the lack of recognition
and support fosters a sense of resentment and disengagement among the workforce,
resulting in a toxic work environment characterized by low morale and high turnover
rates.
Moreover, the company's reputation and credibility are at stake as word spreads about the
unfair and demotivating work culture. This can deter potential talent from joining the
company and erode trust and loyalty among existing employees. Ultimately, the bottom
line of the company may suffer as a result of decreased employee engagement and
performance, leading to financial losses and hindered growth opportunities.
Furthermore, the long-term effects of this issue extend beyond immediate productivity
losses. Employee burnout and disengagement can have lasting impacts on their mental
and physical well-being, leading to increased absenteeism, higher healthcare costs, and
decreased overall job satisfaction.
In conclusion, the consequences of implementing an unjust and demotivating policy

regarding bonuses and incentives are far-reaching and detrimental to both the company
and its employees. It is imperative for the company to address this issue promptly and
implement fair and transparent reward systems to foster a positive and supportive work
environment conducive to employee growth and success.
5. Solution:
Company A's ill-advised policy regarding bonuses and incentives has harmed employees
and the overall working environment. To address this issue and foster a more positive and
productive atmosphere, several solutions can be considered:
- Revise evaluation criteria: Company A should overhaul its bonus and incentive policy to
ensure that evaluations are based on employees' actual performance and contributions
rather than arbitrary or narrow criteria. Implementing a more comprehensive and fair
evaluation system will help recognize and reward employees who genuinely excel in their
roles.
- Transparency in bonus criteria: Ensure that the criteria for rewards are clearly
communicated, transparent , and understood by all staff members. That helps build trust
and reduces ambiguity while fostering a more positive working environment.
- Establish a feedback mechanism: where employees can provide input on the bonus and
incentive policy. Encourage open dialogue and listen to employees' concerns and
suggestions for improvement. This will demonstrate that the company values employee
input and is committed to creating a fair and motivating reward system.
- Training and development opportunities: Invest in training and development programs

to support employees in further developing their skills and contributing more effectively
to the company. Providing opportunities for growth and advancement can boost morale
and motivation among employees.
- Recognition and appreciation: Implement regular recognition programs to acknowledge

employees' hard work and achievements. Simple gestures such as verbal praise,
certificates of appreciation, or employee of the month awards can go a long way in
boosting morale and fostering a positive work culture.
By implementing these solutions, Company A can work towards creating a fair,

professional and dynamic work environment, ultimately leading to increased productivity
and employee satisfaction.
6. Conclusion:
Bonuses and incentives play an important role in encouraging and promoting employee
performance.
By providing bonuses and incentives, companies can create a positive work environment
and motivate employees to be more productive.
Bonuses and incentives can also create healthy competition among employees, promoting
personal development and commitment to work and business.
This not only benefits the individual but also contributes to the success and sustainable
development of the organization.

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NGÂN HÀNG NHÀ NƯỚC VIỆT NAM BỘ GIÁO DỤC VÀ ĐÀO TẠO

TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP.HỒ CHÍ MINH

TP. Hồ Chí Minh, tháng 03 năm 2024

 Forms of bonuses and incentives:

- Financial rewards: cash, commissions, performance-based bonus, profit sharing, stock.

- Non-financial rewards: Additional vacation days; gifts; commendation, certificates of

 Advantages and disadvantages of bonuses and incentives:

- Enhanced performance: The anticipation of receiving bonuses and incentives can

- Financial costs: Implementing bonus and incentive programs requires significant

- Dependency risks: Employees may become overly dependent on bonuses and

For a prolonged period, Company A has implemented an ill-conceived policy regarding

There are some reasons lead to this problem in the company.

In conclusion, the consequences of implementing an unjust and demotivating policy

- Training and development opportunities: Invest in training and development programs

- Recognition and appreciation: Implement regular recognition programs to acknowledge

By implementing these solutions, Company A can work towards creating a fair,

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