But is it really a good thing to work in an industry that pays big bonuses?
WHY THEY WORK
Bonuses exploit our silly old caveman brains. Instead of believing we make $72,500 a year, we believe we make $70,000 a year and get excited when an extra $2500 arrives.
Humans readily adapt to a new higher level of affluence when it becomes routine, getting a bit extra above the routine activates reward sensors in our brains.
Marketers like to exploit this by anchoring our expectations first up, and then adding pay-offs. Think about those infomercials that show you the product and the price, and then add on a lot of extra bonuses like a free set of steak knives. That's the anchoring effect and it's why bonuses tickle our reward mechanisms more than simply receiving what we expect.
WHY BUSINESSES LIKE BONUSES
Businesses often structure pay so it includes bonuses.
They can pay employees more in good years and less in bad years, which means costs are lower in bad years, and profits can be more consistent.
The more that employee compensation consists of variable bonuses, the more variable their costs can be.
Nice consistent profits make shareholders happy. A pay structure that stints on base pay in favour of variable bonuses shifts the risk. Instead of shareholders facing variable dividends, workers get variable pay. Whether you think that's fair or not might depend on if you make most of your money from working or from investing.
DO BONUSES MAKE US WORK HARDER?
Rewarding people in the good years should make them work harder, right?
If you have 30,000 colleagues, each individual's contribution to the company's success is modest.
The baggage handler who doesn't give a damn is unlikely to spend 12 months doing his darnedest to help when he knows profit is just as likely if he does the bare minimum. If employees are rewarded collectively, then instead of busting their butts most people are likely to engage in at least a bit of "free riding."
Qantas staff are no doubt mostly diligent and motivated but a major reason the Flying Kangaroo bounced back into the black is lower fuel costs.
Qantas is now spending around A$900 million less on fuel and associated costs than it was in 2015. That is partly because of fuel efficiency and price hedging but mostly due to factors beyond their control.
The oil cartel OPEC fell into disrepair in 2014 when Saudi Arabia agreed to pump more oil from its enormous reserves and the cost of a barrel of oil fell below US$50.
Airline fuel got cheaper and Alan Joyce suddenly found himself at the controls of a company that was making good money.
So in the end the bonuses for Qantas staff have a lot to do with the price of a barrel of oil.
When you look at it like that, Qantas staff bonuses start to look more like part of the company's oil price hedging strategy and less like a reward for hard work.
Jason Murphy is an economist.