Want a Bonus? Unfriend Your Boss
A new study reveals how far managers will go to avoid the appearance of playing favorites.
Being close with your manager is almost always a good thing: it can help you be more engaged and confident in your day-to-day performance, open doors for you across the company, and if you're very lucky, earn you a mentor for life. But when it comes to getting a bonus, that close relationship could work against you.
Indeed, when managers hand out discretionary bonuses-and when employees will know who gets the rewards-bosses often pass over their friends in favor of other workers, according to a study in the Journal of Experimental Social Psychology. "People are nervous about being seen as rigging the system," says Tom McMullen, senior client partner at Korn Ferry and leader of the firm's North America Total Rewards practice. It's a similar situation found in Little League sports, where one of the kids' parents coaches the team. "The dad can be harsher on their own kid versus others. They want to make a perception that they aren't biased," he says.
The findings come at a time when people are more transparent than ever about what they earn, particularly as governments around the world enact legislation to address the gender pay gap. According to a recent survey by Korn Ferry, nearly 40% of professionals say telling their coworkers how much they make is more appropriate today than it was five years ago. The change appears to be generational, with 94% of professionals saying younger workers are more willing to talk salary than older workers.
What's more, bonus and rewards programs can be considerably more effective if there's a transparent set of rules around them, according to the study. In it, researchers asked nearly 1,200 people to make a simple decision: either give a larger bonus to one of two workers who did a slightly better job, or treat the two workers equally. But the answers varied depending on the other information researchers divulged. If the people knew that their bonus decision was going to be made public, then they were far less likely to give a bonus to a worker who also was a friend-even if the friend was the better performer.
In private, however, participants were far more likely to give more to their deserving friend. Such behavior indicates that people are more likely to be fair in public than in private, so much so that they're even willing to go against what they might privately think is fair in order to avoid the public appearance of bias. "They forsake being impartial to appear impartial," says Alex Shaw, an assistant professor of psychology at the University of Chicago and one of the authors of the study.
If you're cozy with your boss, you may be tempted to create a bit of distance. But it's important to remember that companies are moving not just toward transparency, but measuring pay increases against more objective norms, which will ultimately help everyone. It's one reason why many larger companies have been moving toward incentives rather than discretionary bonuses. Incentives are a transparent agreement between employee and employer. If an employee achieves a particular level of sales or other objectives, he or she gets rewarded in a certain way. The metrics and rules are known in advance.
It's also why, over the last several years, some firms have adopted employee-recognition programs, essentially taking some of the reward decision-making out of the boss's hands. It gives workers a chance to acknowledge peers who've been particularly innovative, impactful, and successful. "Peer-to-peer recognition-and not just boss-subordinate recognition-is seen as most powerful," McMullen says. "This can take the heat off the boss."