Sounds to me that the message has been lost somewhere, probably between the union and management talks. Yes bonus payment is a crude way of rewarding people, but not everyone reacts to being 'told' to perform. Better a carrot than a stick sort of thing.
The other point is that increased engineer performance does NOT equal increased charges to customers. PMs up to date, completing jobs in 2hrs rather than 3hrs, diagnosing problems 1st time rather than on the 3rd or 4th visit all help toward improving profitability, the charge to the customer remains the same on a fixed rental agreement. Any bonuses paid would be self funding. Infact working more efficiently would allow charges to customers to be lower, thereby making the offering more competitive and increasing sales.
Without knowing, I would guess that central principles are not being communicated well and emotion has taken over on both sides.