Why Bonuses Tend To Be More Effective Motivational Tools Than Salary Increases

Questions for Discussion and Review

Answer these questions;

1. Under what conditions will an employee be likely to perceive that his or her psychological contract has been broken?
2. Why are accurate performance appraisals a key ingredient in having a motivated workforce?
3. Despite the positive effects of merit pay on motivation, when might an organization not want to use it?
4. Do all employees want their pay to be based on their performances? Why or why not?
5. Why do bonuses tend to be more effective motivational tools than salary increases?