Bonuses are one of the responsibilities that many business owners learn to really dislike, and the reason for the dislike is that setting correct and fair metrics are very difficult to do. If there are no metrics for judging whether or not a bonus is due and how much is due, then the bonus can become a disincentive! Instead of a good leader, the leader will be viewed, at best, as a benevolent dictator.
Let me set up some basic thoughts as to some different potential levels of employee performance compensation: