One of the U.K.'s best-known fund managers has scrapped bonuses at his investment management firm, saying there is little correlation between bonuses and performance.

Woodford Investment Management, founded by star stock-picker Neil Woodford, said Monday that it had ceased paying discretionary bonuses in April.

"While bonuses are an established feature of the financial sector, Neil and I wanted to take the opportunity to do something different that supports the firm's culture and ethos of challenging the status quo," CEO Craig Newman said in a statement.

"We have implemented a remuneration scheme that is fair and appropriate for Woodford employees and, ultimately, clients. Drawing on our experience of various bonus-led remuneration models, we concluded that bonuses are largely ineffective in influencing the right behaviors," he added.