Bonuses don’t work, except perhaps in the most menial of piece work activities where there might truly be a genuine link between how fast/hard I work, and the number of tasks I complete. February’s issue of People Management carried a Duncan Brown Blog quoting some research cited in The Guardian. Here’s the link to the research
http://www.alfiekohn.org/managing/incentives2002.htm

and here’s the link to Duncan’s piece
http://www.peoplemanagement.co.uk/pm/articles/2011/02/variable-pay-is-superior-to-bonuses.htm

Remember – the more complex the bonus system, the more energy your staff will put into gaming it, as much for their entertainment as to how many perverse results they can create as for their desire for money.
I’m with Duncan on variable pay – expect to see more from us on this subject in the coming months.