Bonus seems to be a dirty word these days, you know as in Wall Street bonuses or bank bonuses. Bonuses are paid because of the performance of an organization and an individual’s role in that performance. While one can argue with accuracy that some bonuses are not well deserved, the fact is that a bonus is designed to elicit better performance in achieving certain goals (the fact one is paid to do a job notwithstanding). As a retired compensation and benefits executive, I know firsthand how tenuous the relationship between individual performance and a goal can be. In fact, one of the biggest problems in creating incentive plans is the line of sight between the individual job and the high-level goal. Politicians have no such problem however.
Incentive plans and bonuses can motivate in the wrong way, they can lead to manipulation of the results, sweet heart deal targets and in some cases outright cheating. In other words, if you incentivize someone to do something, he or she usually will do it and in some cases at any cost. You know, like providing incentives for people to buy homes they cannot afford.
Because of the financial crisis politicians were quick to jump on the anti bonus bandwagon. The bonuses were not earned, they took a bonus and a taxpayer bailout, bonuses were outrageously large, and bonuses were paid for results while Rome burned. There is some validity to all this criticism, but politicians are hardly the ones to level it.
How is incenting someone through bonuses any different from taking PAC money or loading legislation with unaffordable earmarks favoring local voters or voting for massive legislation without any means of paying for it? In both cases, someone is seeking a reward for their actions and their actions may well be irresponsible and harmful to the larger good.
Politicians want to be re-elected; executives want more money in part to contribute to friendly politicians running for reelection who in turn want to criticize high bonuses to appear favorable in the eyes of their constituents.
Good grief, we all could use five cents worth of psychiatric care.
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