SSS president Emil de Quiros earlier defended the directors' P1 million bonuses, saying these were given pursuant to the performance-based incentive system
of the Governance Commission for GOCCs.
The PBB is one of the components of the administration's performance-based incentive system
(PBIS), which recognizes and rewards exemplary performance in government.
However, as Holmstrom (1989) observes, firms are expected to become innovative not only by employing individuals who have the capacity to generate key innovations but also by rewarding those individuals--i.e., by adopting performance-based incentive systems
that encourage the development of new products and services.
Many performance-based incentive systems
have come to an end because companies haven't rewarded employees sufficiently.