Why the psychology behind year-end bonuses is flawed

While most companies persist with the annual performance-linked bonus, some have offered incentives linked to exercise or body mass index

However, a better work environment and training, more respect, a recognition of employees’ efforts and revenue-sharing models can be as empowering as cold, hard cash

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Some businesses have started moving away from the traditional approach to year-end bonuses and started linking extra payments to factors other than generating profit, such as employees’ physical fitness. Photo: Shutterstock

Kamala Thiagarajan

Kamala Thiagarajan is a freelance journalist based in Madurai, southern India.

Published: 4:31pm, 29 Dec 2023Updated: 6:55pm, 29 Dec 2023

The business world is no stranger to senior management making eye-popping, even eccentric demands on their employees, sometimes for the sake of their own health. Nowhere is this practice more evident than while handing out those coveted year-end bonuses.

A company in Guangdong province, Dongpo Paper, controversially cancelled its traditional annual performance-linked bonus for employees earlier this month. Instead, it said the year-end bonus would be spread across 12 months, but there's a catch: employees need to start moving.

If an employee runs 100km every month, they will earn 130 per cent of the stipulated monthly bonus. Running 50km will secure the full monthly bonus, whereas those who manage 30km will receive 30 per cent of the bonus.

“A company can last long when its employees are healthy,” said Lin Zhiyong, the company’s chairman, who is an avid mountain climber and who reached the summit of Mount Everest twice according to his WeChat account.