What is typically a downside to offering bonuses as a motivational tool?

Offering bonuses as a motivational tool can indeed require significant investment from the business. This is because bonuses are often contingent on both individual performance and overall company performance, which may necessitate setting aside substantial funds. Such financial commitments can strain a company's budget, particularly if the organization faces unexpected expenses or economic downturns.

Additionally, while bonuses can incentivize employees to achieve targets, they do not guarantee sustained motivation over the long term. This can lead to a situation where employees focus primarily on short-term gains rather than long-term growth and collaboration, potentially overlooking the importance of teamwork and collective success.

Moreover, using bonuses can inadvertently foster a competitive atmosphere among employees, which may undermine collaboration and foster resentment among team members. The aim of promotional practices should ideally align with fostering a harmonious workplace that encourages collaboration, rather than competition that could hinder overall productivity.

Finally, managing the logistics surrounding the allocation of bonuses can be administratively burdensome, requiring careful tracking of performance metrics and equitable distribution among employees, which can consume valuable time and resources in human resources and management.