Synthesis of Articles Related to “How Effective are Bankers’ Bonuses?”

Synthesis of Articles Related to “How Effective are Bankers’ Bonuses?”

2.1.    In this section, further reduce the summaries in section 1 to summaries 20-30 words in length.  Each summary should give the gist of the source.  Note down an appropriate in-text reference next to each summary. (300 words)

An effective rewards strategy should have clear goals, must be in alignment with business objectives, and be able to satisfy the company and employees’ needs, under the guidance of an effective HR {Brown (2001) in Armstrong (2006:p 43-46)}.

Armstrong (1994) similarly insists on importance of performance management in the rewards system. The amount of bonus given can be agreed either before or after the work. However, bonuses after work are better as they allow for evaluation of performance.

According to Rabey (2001: p 26-28), and Bunnewell (2009), Self-motivation is important than reward motivation, so, bankers’ bonuses are worthless if they lack self-motivation, for they will compromise company goals. Similarly, Milline (2008) argues that a bonus for employees without a value for them will be negative to the company, as valuing employees is more motivating than giving them financial bonuses.

For better performance of a company, senior employees must be offered bigger bonuses as incentives for them to perform better (Nicholson 2012). Matthew (2010) similarly agrees that bonuses increase the risk-taking capabilities of employees thus good performance.

Bender (2011) considers both negative and positive effects of bonuses. In “Deloitte Debates,” there is an argument that the amount of bonus given to bankers will determine the level of performance, thus bigger bonuses equals best performance, and vice versa.

In “the Big Issue,” there is an emphasis on employee self-motivation, rather than reward-motivation. More importance is placed on an intrinsic motivation rather than external motivation. Self-motivation enriches the soul and boosts self-worth, in addition to bringing meaning in one’s life.

The relationship between high profits and big bonuses is emphasized by Preston (2012). Governments’ investment in provision of high bonuses will increase efficiency in their practice. However, if banks provide high bonuses, it can be detrimental to the national economy but useful to the bank.

2.2    Re-organise/cut-and-paste/re-group these summaries into coherent groups, which could form the basis for paragraphs. (100 words)

An effective rewards strategy should be goal-oriented and determined by performance evaluation by the HR (Brown 2001 in Armstrong 2006, p 43-46: Armstrong 1994).

Self-motivation is more important than financial bonuses, as it boosts self-development, by the enrichment of one’s soul and boosting self-worth; and more focus of employees to the company goals (Rabey 2001, p 26-28: Bunnewell 2009: Milline 2008: “the Big Issue”).

Bonuses for senior employees and other employees increase their performance, thus boosting productivity of the company. The bigger the bonus, the higher the performance (Nicholson 2012: Matthew 2010: Bender 2011: “Deloitte Debates,”).

High bonuses in banks maximize their productivity. However, this influences negatively on the government economy (Preston 2012).

Write a paragraph plan for your synthesis, based on your re-organised groups in 2.2 (50 words)

Paragraph 1


Paragraph 2

-Types of bonuses

Paragraph 3

-Advantages of bonuses

-Disadvantages of bonuses

Paragraph 4


Now write the synthesis including in-text citations and end-of-text references (350 – 450 words excluding references)

Most employers, apart from giving salaries to their employees, offer them additional bonuses and benefits. A bonus is therefore a supplementary pay, which is not considered as a part of an employee’s regular payment. This is given to the employees who have portrayed good performance in their work, with regard to the company goals.

There are different types of bonuses, and these vary from company to company. However, most companies give bonuses based on employee performance and the performance of the company. Sometimes managers may offer their employees discretionary bonuses. A discretionary bonus is offered to employees when the employer cannot determine the formal performance goal. Nonetheless, an employee’s bonus is determined by their performance level, and sometimes by their team’s performance level.

As Bender (2011) notes, bonuses have both negative and positive effects. Bonuses are beneficial to both the employees and the company. First, bonuses are tied to the job performance of employees; therefore, these have a positive influence on employees’ performance. According to Nicholson (2012), when senior employees are given bonuses, they will be motivated to work harder in their job, and this will alleviate the company productivity, as the senior employees play crucial roles in the overall running of the company. Similarly, Matthew (2010) argues that bonuses make employee take on new risks in their job, in relation to performance, and this boosts company performance. It is also debated that the amount of bonus given will determine the level of employee performance, thus, the higher the bonus, the greater the performance (“Deloitte Debates,”). On the negative part, bonuses are a form of external motivation, which cannot be compared to self-motivation (“the Big Issue”). Financial bonuses do not lead to personal development and soul enrichment as self-motivation Bunnewell (2009). Self-motivation is essential for employees; therefore, bankers’ bonuses are less important if they are devoid of self-motivation (Rabey 2001: p 26-28). On the other hand, Milline (2008) agrees that bankers’ bonuses without self-motivation may end up being detrimental to the company. This motivation comes when the employer, apart from offering financial bonuses, also shows the value they have for their employees. Therefore, value for employees is more motivating than financial bonuses.

In conclusion, as we have seen, the main aim of bankers’ bonus is to improve employee performance, hence company productivity. This is an important role, which bonuses play in companies. However, bonuses may also be detrimental to a company, if they are not accompanied with self-motivation. Employers can help employees be self-motivated by valuing their personal contribution to the company. Nonetheless, bankers’ bonuses will continue to be resourceful in companies.


Works Cited

 “Deloitte Debates.” Alternatives to Paying Big Bonuses – are big bonuses effective for financial

services firms to attract talent? 2012. Web. Retrieved 10th December 2012


“The big issue.” Bankers’ bonuses Money is not the only motivating force. The Observer.

2012. Web. Retrieved 10th December 2012


Armstrong. “Performance Management: Key Strategies and Practical guidelines.” P.153-

156. 1994.

Armstrong, M. “Strategic reward: making it happen.” London: Kogan. 2006.

Bender, Ruth. “ Bankers’ bonuses: the case for and against.” 2011. Web. Retrieved, 10th

December 2012 <>

Matthews, K. Controlling Bankers’ Bonuses: Efficient Regulation Or Politics Of Envy?. Article.

30 (1), 76-77. 2010.

Miline, P. “Feeling valued is the best motivation: Perks and pay.” Human Resource Management

International Digest. 16 (3), 28-31. 2008.

Nicholson, Nigel. “Bonuses Improve Performance.” Management Today. 1 (1), 18. 2008.

Rabey, Gordon. “Industrial and Commercial Training.”33 (1), 26-28. 2001.


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