“HR Heretics” | How CPOs, CHROs, Founders, and Boards Build High Performing Companies Rethink Your Bonus Program
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Oct 21, 2025 Kelli and Nolan dissect why traditional bonus programs often stumble in early-stage companies. They highlight the pitfalls of fixed structures that lead to organizational debt and the challenge of changing established norms. The discussion shifts to innovative alternatives like flexible sprint incentives and spontaneous spot bonuses, which can foster motivation and loyalty. They emphasize the importance of agility in rewards to better align with evolving company goals and avoid creating people debt.
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Bonuses Drive Behavior — Match Stability
- Bonus programs strongly drive behavior and therefore must match stable company goals.
- Early and mid-stage companies struggle because moving goalposts make bonuses counterproductive.
Prefer Competitive Pay Over Transactional Bonuses
- Avoid treating compensation as transactional; pay competitively to reduce need for bonus levers.
- If you must use variable pay, prefer clear, stable metrics over ad-hoc tasks.
Bonus Programs Are Largely Legacy And Sticky
- Most companies (around 92–96%) have bonus programs, often as legacy or recruiting artifacts.
- Once offered, bonuses create expectations that are hard to retract and complicate forecasting.