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AIG is in the news again. They are being beat over the head because someone has found that they have 374 bonus plans. While most people are upset seeing the word attached to AIG in any way, the fact that they have 374 bonus plans is not surprising in a company of around 100,000 employees. I would suggest that they should have more!
The issue is not the number of plans but the quality of the plans. In a bad economy, bonuses can be used very effectively to increase business. The problem I had with AIG bonuses when they were first discovered (See my blog – AIG Gives Bonuses a Bad Name) was that they were obviously not tied to the right business behaviors or results. When done right, bonuses are a very effective way of driving outstanding business success; when done incorrectly, as they usually are, they can be devastating.
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