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October 13, 2006
The Disappearing Bonus as Incentive

Some companies are trying to encourage M.B.A. students to make an early decision on job offers by using bonuses that decrease in value or go away once a deadline is reached, the New York Times reports.

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The use of declining bonuses, also known as incentive bonuses, is more common in the finance and consulting industries than others, and the deadlines are usually set for October, according to the newspaper. Even though the bonus may decrease or disappear at the deadline, the job offer remains, the newspaper notes.

One top business school tells the newspaper that it prohibits declining bonuses.

"Harvard Business School believes, and I agree, that students should not be making employment decisions based on undue pressure," says Jana Pompadur Kierstead, director of M.B.A. career services at Harvard, tells the newspaper. "We don't believe it makes for good decisions in the long run."

Two companies that offer declining bonuses are Mercer Management Consulting and Microsoft, the newspaper reports.


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