The worst time to surprise your team with a bonus is halfway through the job
Spot bonuses are supposed to motivate people to push harder. But hand one out halfway through a tough assignment, and you may accidentally tell employees they’ve already done enough.
Managers often reach for spot bonuses when a team is deep into a product launch, quarter-end close, or other late-night slog. The logic seems obvious: show people you appreciate the extra effort, and they’ll return the favor with even more effort.
But new research suggests the opposite can happen.
Economists led by Gianluca Grimalda of the University of Passau tested the idea in Bogotá. In 2014, they hired workers for what they thought was a one-day data-entry job. After working all morning separately, some pairs were told at lunch that they had earned a bonus worth one-third of the day’s pay.
The bonus didn’t make them faster. It made them stop getting faster.
While workers who received no bonus picked up their pace in the afternoon, those who got the money generally stuck to their morning speed. A 2023 repeat of the experiment found the same pattern, although the effect was smaller.
The workers weren’t slacking off. They simply stopped pushing.
What a surprise bonus can actually signal?
The researchers think the bonus sent an unintended message: the boss is already happy with me.
Workers who received the money were more likely to believe there was little chance they would lose their jobs before the day ended. In other words, the bonus reduced the pressure to prove themselves.
That’s a problem for managers because employees rarely announce that they’ve decided to coast. In the experiment, bonus recipients reported feeling much like everyone else—even as their output stopped accelerating.
The study also found that why someone gets a bonus matters.
When a faster worker received the bonus, slower colleagues often responded by picking up the pace. Workers seemed to accept being beaten by someone who had earned it.
But when a coworker received the bonus simply because they came from a poorer neighborhood, some passed-over workers slowed down. Losing to better performance felt fair. Losing because someone else was deemed more deserving felt different.
When extra money really does motivate
Timing matters.
Michael Luca of Harvard Business School and colleagues found that workers became more productive when they were told before starting that their pay would rise from $3 to $4 an hour. Workers hired at $4 from the beginning, however, didn't work any harder.
The difference wasn't the money. It was the message.
Workers who received the raise upfront were told the budget had come in higher than expected. They interpreted the extra pay as a favor—and responded with extra effort.
Compare that with Grimalda's workers, who got an unexplained bonus at lunchtime. With half the job already done, the payment could easily have looked less like an incentive and more like a judgment: You're doing fine. Keep doing what you're doing.
Don't reward the past. Incentivize the next push.
Another experiment by UC Berkeley economist Stefano DellaVigna found that simply doubling workers' pay midway through a long day didn't make them work faster.
But when workers received an unexpected $15 thank-you and were then asked to stay and do additional work for free, they were more willing to accept the request.
That's the crucial distinction.
Money may not make people work faster. It can make them more willing to do more.
For managers, the lesson is straightforward: don't surprise your team with a bonus and stop there.
If you want the bonus to change behavior, give it before the next big push. Tell employees it's extra. Then tell them exactly what you need them to accomplish.
The best spot bonus isn't a reward for the work that's already done.
It's a signal about the work that's coming next.