Motivation
...s will not be discouraged to do extracurricular activities that they find useful for their future jobs. On the other hand, for the contingent bonus policy, students will notice that the company want them to not only graduate but do well in classes. Furthermore, the performance, in this case, is measurable and quantifiable, and has a tight link with students’ effort. Thus, if the company could make the determination process of bonus clear and fair, students will work harder to receive more bonus. Nonetheless, it could discourage student from involving in activities outside classes which may useful for company in the future. People are motivated by two types – intrinsic and extrinsic. In the question, both policies are extrinsic motivation so I assume that the intrinsic motivation is alike. Therefore, this analysis will focus more on extrinsic motivation. For the fixed bonus policy, students will recognize that the company policy is only to encourage them to graduate, because they could misinterpret bonus as something they should get instead of a gift. Thus, this policy will not have much impact on students who already have that goal of graduation. However, this policy may escalate intrinsic motivation of students in term of trust. Stude...