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Good point Doug. The word bonus can mean many different things.

Part of the problem we had in implementing performance-based pay at the US Postal Service is that the word bonus typically meant something given after-the-fact based on a subjective evaluation of a person's contribution. When we tried to change our culture to one where COLAs, general increases, and automatic step increases were replace with merit and incentive pay, the critics still viewed the incentive pay as "bonuses." Their eyes glossed over when we tried to explain the difference between bonuses and incentives.

But you are right. We must step up and explain the differences, even though sometimes we may feel like Don Quixote tilting at windmills.

I'm not sure we'll ever totally erase these terms being used interchangeably, however, it is definitely worth our while to make the effort to have the discussions because the differences are meaningful.

Great points in the article regarding the differences between bonuses and incentives. These need to be reinforced with organizations struggling with how to properly and fairly compensate their employees.

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