Mixed feelings about this one.
I don't see any reason why, if employees raise their productivity levels above and beyond duty, then such effort should be praised and rewarded (if the latter is possible).
Most of us know that a little bit of praise raises morale and works wonders, so why begrudge it in this case? It represents just £5 a week extra each in any case.
As we don't know all the facts about whether additional staff could, or should, have been taken on, then there's little else that can be said.