Ask HN: How to design a fair bonus system for software engineers? • Hacker News Board

Re: Ask HN: How to design a fair bonus system for software engineers?

#11

Post by tonyedgecombe » Wed, Sep 18, 2019, 8:29 PM UTC

idunno246 wrote: post #6

2rsf wrote: post #4

Take a step back and answer why do you need a bonus system ? Dan Ariely and other Psychology and Behavioral Economists claim that the value of bonuses is not big or even negative [0]. My experience is that bonuses tied to performance leads to a bad work environment, and if at all benefits only part of the people- the backstabbers or the geniuses [0] https://www.wired.co.uk/article/dan-ariely-bonuses-boost-act...

There’s a video that I really like, talking about the same research that knowledge based jobs, bonuses decrease performance. https://m.youtube.com/watch?v=u6XAPnuFjJc&feature=player_emb...

Punished by rewards is an interesting book on the same lines.

https://www.amazon.com/Punished-Rewards-Trouble-Incentive-Pr...

Re: Ask HN: How to design a fair bonus system for software engineers?

#12

Post by tdeck » Wed, Sep 18, 2019, 9:53 PM UTC

2rsf wrote: post #4

Take a step back and answer why do you need a bonus system ? Dan Ariely and other Psychology and Behavioral Economists claim that the value of bonuses is not big or even negative [0]. My experience is that bonuses tied to performance leads to a bad work environment, and if at all benefits only part of the people- the backstabbers or the geniuses [0] https://www.wired.co.uk/article/dan-ariely-bonuses-boost-act...

Bonus is a way of trapping someone at the company until the one time of year when the bonus is given out, so you can better plan for attrition.

Re: Ask HN: How to design a fair bonus system for software engineers?

#13

Post by drag00n » Thu, Sep 19, 2019, 7:33 AM UTC

hedgew wrote: post #9

The surest and most effective way to align developer interests with company interests is to give equity. Bonuses in software engineering get very complicated and messy very quick, and probably shouldn't be used outside of some specific scenarios. Equity can also help foster a sense of ownership, which is probably the best high level driver for good and profitable code.

Okay, but then I have the same question: how do you give equity in a fair way? Is it some formula of who came earlier or it depends on current company valuation?

Re: Ask HN: How to design a fair bonus system for software engineers?

#14

Post by protonimitate » Thu, Sep 19, 2019, 2:40 PM UTC

2rsf wrote: post #4

Take a step back and answer why do you need a bonus system ? Dan Ariely and other Psychology and Behavioral Economists claim that the value of bonuses is not big or even negative [0]. My experience is that bonuses tied to performance leads to a bad work environment, and if at all benefits only part of the people- the backstabbers or the geniuses [0] https://www.wired.co.uk/article/dan-ariely-bonuses-boost-act...

My workplace recently started tying yearly bonuses to "performance goals" which are set throughout the year. I think the intention was to get employees more "invested" in their performance and value contributions. However, all it's done is make goal setting another set of hoops to jump through for HR. You can pretty set any goal you want, and as long as you have something on paper, management sees it as "good enough" and you still get your bonus.

I really loathe hr-mandated performance/improvement goals. Tying it to bonuses just created another level of stress to the whole process, and doesn't really add any value for anyone.

Re: Ask HN: How to design a fair bonus system for software engineers?

#15

Post by roland35 » Thu, Sep 19, 2019, 4:04 PM UTC

tdeck wrote: post #12

2rsf wrote: post #4

Take a step back and answer why do you need a bonus system ? Dan Ariely and other Psychology and Behavioral Economists claim that the value of bonuses is not big or even negative [0]. My experience is that bonuses tied to performance leads to a bad work environment, and if at all benefits only part of the people- the backstabbers or the geniuses [0] https://www.wired.co.uk/article/dan-ariely-bonuses-boost-act...

Bonus is a way of trapping someone at the company until the one time of year when the bonus is given out, so you can better plan for attrition.

I thought they were sometimes prorated? I suppose that depends on the company policy though!

Re: Ask HN: How to design a fair bonus system for software engineers?

#16

Post by roland35 » Thu, Sep 19, 2019, 4:07 PM UTC

protonimitate wrote: post #14

2rsf wrote: post #4

Take a step back and answer why do you need a bonus system ? Dan Ariely and other Psychology and Behavioral Economists claim that the value of bonuses is not big or even negative [0]. My experience is that bonuses tied to performance leads to a bad work environment, and if at all benefits only part of the people- the backstabbers or the geniuses [0] https://www.wired.co.uk/article/dan-ariely-bonuses-boost-act...

My workplace recently started tying yearly bonuses to "performance goals" which are set throughout the year. I think the intention was to get employees more "invested" in their performance and value contributions. However, all it's done is make goal setting another set of hoops to jump through for HR. You can pretty set any goal you want, and as long as you have something on paper, management sees it as "good enough"…

I have experience with the same setup - quarterly goals split between project goals and some training/process improvement type goals.

Most of the time it seems people just write down what they should be doing anyways, which defeats the purpose! In school "bonus" always meant going above the regular work (not that I am advocating tying additional money based on working more than your normal job - that seems like it would negatively effect morale over time!)