Organizations considering incentive plans must determine who is eligible. Common eligibility criteria include whether the use of punitive contracts can elicit more negative and counterproductive reactions from workers to bonus contracts. There is some evidence that this may indeed be a cause for concern. First, there is evidence that criminal contracts are indeed considered less fair than workers` bonus contracts. For example, workers who participated in one of the previously audited laboratory experiments were also asked to assess the fairness of the employment contract they faced in the experiment to a degree ranging from “extremely fair” to “not at all fair” [1]. Employees who were faced with the bonus contract felt on average that the employment contract was fairer than those who were faced with the criminal contract. Similar results are reported in another study [7]. Our company can create incentive plans at the beginning of each year. These plans may include: the average productivity of workers assigned to the penalty condition was about 1% higher than the productivity of workers assigned to the bonus condition. In addition, the probability of workers meeting the target in accordance with the sanction conditions was between 2% and 9%. While the overall impact on productivity was relatively small (and was found only for chain workers and not for product control workers), it should also be noted that the handling was in fact minimal (e.g.B. workers did not actually receive the lump sum bonus at the beginning of the period, but were simply informed that the bonus was awarded to them on an interim basis). Moreover, and perhaps most importantly, the increase in productivity was virtually free, as it contained only a minimal reformulation of the letter that the company had sent to workers to introduce the new incentive system.

An important difference between discretionary and non-discretionary bonuses in the United States is that non-discriminatory bonuses must be included in salary calculations. Our company will comply with its legal obligations. This directive applies to all regular full-time and part-time workers as well as workers on contracts of one year or more. Seasonal workers, trainees and temporary workers with contracts of less than one year are not entitled to bonuses. There is also evidence that criminal contracts can have counterproductive effects on performance aspects that are not directly regulated by the treaty. In one experiment, participants were asked to perform two tasks [11]. In both tasks, they were paired and assigned to either the role of “employer” or “worker.” In one task, workers had to choose a portfolio of risky investments for their employer and were paid either by a bonus or by a criminal contract based on ex post profitability of investments. In the other task, workers had to choose how many shares of a risk-free investment for their employer to acquire. This second task was not resolved by a benefit contract, but a discretion chosen by the employer was paid to the employees. It was found that employees acquire fewer shares in the non-incentivized task when the incentivized task had been paid by a criminal contract than by a bonus contract. Post-experimental questionnaires show that the negative influence of sanction contracts on workers` performance is due to the detrimental effect of these contracts on the relationship of trust between employers and workers.

5.1 Other bonus plans: The bonus plan replaces all previous bonus plans and cannot be changed unless it has been approved in writing by the CEO and the Chairman of the Compensation Committee. Criminal contracts are considered more unfair and controlling than bonus contracts. The bonus plan applies to all regular employees, except that employees covered by the sales commission or any other incentive program do not