Dive Brief:

• Bonuses that aren't based on performance are likely counterproductive, according to Fast Company.
• Fast Company mentioned a survey from Willis Towers Watson, which found more than one-quarter of employers deal out bonuses to workers despite the latter failing to meet expectations. And only 20% of employers surveyed say they believe merit pay is effective in driving performance. Yet, they continue to use bonuses.
• Kris Duggan, CEO of goal software provider BetterWorks, told FastCompany that bonuses in many cases no longer motivate employees, calling them little more than "token bribes" for doing expected work.

Dive Insight:

Duggan told FastCompany that a better alternative would be paying a fair wage rather than tying bonuses to performance objectives.

"Post goals openly and publicly," he told FastCompany. "Create an environment and culture that celebrate wins and learn from failures. Expect managers to coach employees and people to stretch themselves."

Another expert, Tim Low, senior vice president of employee compensation software provider Payscale, told FastCompany that bonuses are likely sticking around for the time being, especially since Payscale research found that 81% of highly successful companies reported giving bonuses, and 50% of top performing emlployers plan on increasing their 2016 bonus budget.

Typically, companies add  3% raise each year to employees’ annual salary, Low said, without differentiating between low- and high-performers.