Research Suggests Year-End Bonuses May Lead to Unethical Behavior

Dec 28, 2018

Trying to close the books on 2018? New research into human psychology here in Virginia has some tips.

Considering end-of-year bonuses for your employees? Think again. New research from Virginia Tech’s Pamplin School of Business shows incentives and bonuses can lead to unethical behavior in the workplace.

Bill Becker is co-author of the study and associate professor of management.

“When you have both bonuses and goals together, people kind of fixate on those goals and sometimes they’re willing to cut corners or misreport their time or their costs in order to meet those goals and achieve those bonuses.”

Credit Chris Dlugosz / Flickr

Researchers also found what they call a “slippery step” effect where dishonest behavior becomes increasingly worse when managers become dishonest. So what’s the solution?

“It’s better to have incentives that are actually tied to customer satisfaction or that are tied to accuracy or that aren’t tied to these arbitrary numbers that lead people to focus too much on those and lose sight of the ethics involved.”

In other words, people will do what you reward them for. So if you are going to offer bonuses or incentives, the research shows, tie them directly to the behavior rather than to the metric so employees don’t try to game the system.

RADIO IQ is a service of Virginia Tech.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.