We need to kill the "Annual Bonus." For decades, companies have relied on this tool to drive performance. The logic seems sound: "Work hard for 12 months, and we will give you a big check in December." But in a modern startup, this logic is broken. 𝗧𝗵𝗲 "𝗧𝗶𝗺𝗲-𝗚𝗮𝗽" 𝗣𝗿𝗼𝗯𝗹𝗲𝗺: For a reward to reinforce a behavior, it must happen immediately after the action. The Annual Bonus breaks this rule. You are asking an employee to hustle in February for a reward they 𝘮𝘪�

You have a 3% merit budget. Your managers are staring at a spreadsheet, trying to decide who gets what. The human instinct is to avoid conflict. So, managers do what is called "spreading the peanut butter." They give the low performer a 2.5% raise (to be nice). They give the top performer a 3.5% raise (to stay within budget). Everyone gets a thin layer. It feels fair. It feels safe. 𝗕𝘂𝘁 𝗺𝗮𝘁𝗵𝗲𝗺𝗮𝘁𝗶𝗰𝗮𝗹𝗹𝘆, 𝘆𝗼𝘂 𝗷𝘂𝘀𝘁 𝗵𝘂𝗿𝘁 𝘆𝗼𝘂𝗿 𝗿𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻. Her