We are reaching that time of year when companies are thinking about year-end bonuses for their employees. Companies use these bonuses to reward the performance of their employees during the past year. But there is also the unspoken expectation that these bonuses will also be a factor in motivating employee performance next year.

If you’re the person who gets a big bonus, chances are you’ll want to get it next year too. On the other hand, if you are the employee who receives a meager bonus and reflects how the company evaluated your performance, then you might consider improving next year.

The question I have is: Do year-end bonuses have any far-reaching effect on employee performance motivation? I say, categorically, no! Many factors affect employee performance, and compensation, bonuses, or other financial benefits are just one. If you haven’t read it yet, come back to my blog post on Employee Motivation Myths, which addressed the myriad myths about employee motivation.

For me, people are either inherently motivated or they are not. I believe that the environment can have a negative impact on someone who, by nature, is motivated. But I don’t think you can change performance through a series of benefits or by retaining those benefits. I’m a huge fan of bonuses, although they don’t necessarily have to be at the end of the year.

Bonuses are a way of saying thank you for a job well done. Employees who have performed well will appreciate it and next year they will do well because they are. The personal satisfaction they receive from a job well done is enough. The advantage is simply the icing on the cake. For those employees whose performance is less than stellar, I sincerely doubt that a year-end bonus of any size is a factor in motivate employee performance in the next year.