Wednesday, June 03, 2009

Putting a Price Tag on Good Grades: Cell Phones and Cash Bonuses?

Extortion or an incentive plan? If a child asks for a reward for good grades is that extortion? If a parent pays a cash bonus for each "A" on a report card, does that bonus represent a bribe?

Those are a few of the questions that were debated among a few friends today when one parent shared the news that his award-winning 10-year-old son wanted a new cell phone as a reward for earning great grades and several top academic awards.

The father agreed to the cell phone request. But Anna, a mutual friend, was appalled by the cell phone-for-good-grades barter: "Kids are supposed to get good grades. They don't get paid for that," Anna said.

But in the work world, adults receive bonuses for meeting sales goals or for outstanding performances. Likewise, I know of a family that pays a cash bonus for great grades. It makes sense. Sort of. But I'm torn.

It's important for kids to make a link between hard work and financial rewards. In fact, I'll be discussing that topic on ABC News at 4 p.m. on June 4. I think children should receive bonuses for completing chores and small jobs around the home.

And I applaud a 10-year-old who is savvy enough to use an excellent report card as a negotiating tool. But I have mixed feelings about parents who give in to those demands. The scenario became even more complicated because the student asked his father to pick up the new cell phone immediately after work.

That demand was vetoed. The kid could wait until the weekend, the father said. As a friend, I nodded in agreement.

Sharon is the author of the Frugal Duchess: How to Live Well and Save Money and a contributing writer in Wise Bread's 10,0001 Ways to Live Large on a Small Budget.



Sheila said...

We've always felt that going to school and doing well there was our daughter's "job". If she performs as expected or better than expected, we reward her with money. The amount is determined by the grades.

Diamond said...

I would happily pay my child for good grades if that is what it takes for them to be motivated to succeed and try. But sometimes there is nothing you can do to motivate them and nothing you can take away when they don't receive the grades they should be.