Build It They Will Come, Pay Them They Will Stay; Maybe

It worked in the 1989 movie, ‘Field Of Dreams’, “if you build it they will come”. Now Naperville city officials are banking on the perk, ‘If you pay them they will stay’. The City of Naperville is doing something most municipalities do not do; they are offering city employees a bonus program. The idea is two-fold, 1) give recognition to employees for a job well done, and 2) retain top employees thereby reducing turnover.

Naperville budgets $150,000 per year for bonuses, and bonuses range from $5 up to $1,000 with an annual limit of $2,500 per employee. The program has been existence for five years averaging about $70,000 per year in bonuses. Budgeted bonus dollars not used go back into the general fund. Just because the dollars are there doesn’t mean the money has to be used. Kudos for city officials for not using all the dollars available.

With the economy improving, and the unemployment rate down, retaining good employees becomes more important, so at first glance, offering bonuses to employees is not only a nice thing to do, it’s also prudent. However there are some downsides to the program including the following:

  • Unrealistic expectations. Providing bonuses can create a new benchmark which becomes the new norm. Employees can feel disappointed if they receive a bonus one year, and less or nothing the following year. It can result in a morale deflater.
  • Fostering employee competition. Rather than employees working together as a team, they can see it as competition with each other resulting in unintended consequences.
  • Bonuses are taxable. Employees can be disappointed when they realize the bonus is less than originally stated.

If this bonus/incentive program doesn’t work out, Naperville city officials can always revert back to the old way of doing things. The top-third of employees get a $25 gift card, the middle-third get to keep their jobs, and the bottom-third get fired.

Another option is to have the mayor or city manger give a motivational talk to city employees.

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