The Home Office has been branded "irresponsible" by MPs for paying out a total of £6.5 million in bonuses to its staff.
A total of 11,672 bonuses were paid in 2012/13 to around 40% of staff at the Home Office, which employs around 24,000 staff including agency workers, a report by the Home Affairs Select Committee said.
This equates to a mean bonus of £559, equivalent to 1.7% of the median Home Office salary of £32,799, the group of MPs added.
The Committee commended Home Office Permanent Secretary Mark Sedwill for not taking a bonus, although 18 senior civil servants within the department did receive one.
No further bonuses should be paid, the group of MPs added.
Committee chair Keith Vaz MP said: "It is irresponsible that the Home Office has continued to pay big bonuses despite presiding over many failures.
"I welcome the fact that Mark Sedwill, the Permanent Secretary, has led from the front and refused a bonus for this year, others in the department should have followed his lead.
"We should end the culture of rewarding failure."
The Home Office, which is responsible for immigration and passports, drugs policy, crime policy and counter-terrorism, was required in 2010 Spending Review to make cut savings of 23% in real terms by 2014/15.
In the 2013 spending round, the Department committed to further cuts in real terms of 6.1% in resource spending between 2014/15 and 2015/16.
The Committee's report into the work of the Permanent Secretary said: "With the current financial pressures on the Home Office and the increased public scrutiny of bonuses it is irresponsible of the Home Office to continue to pay out very significant sums in staff bonuses despite poor performance in many areas.
"We recommend that no further bonuses should be paid until a thorough review of performance against the whole range of Home Office activity has been undertaken."
Mr Sedwill took up the post of permanent secretary at the Home Office in February 2013 and was previously Director General at the Foreign and Commonwealth Office and the Prime Minister's special representative for Afghanistan and Pakistan.
Elsewhere, the Committee hit out at police procurement, that is the management of purchasing goods for the service, as "dismal".
The group of MPs said the department had the "sketchiest idea" of what was happening among police procurement, which it was relying on to deliver much of its financial savings.
A Home Office spokesman said: " The Home Office is succeeding in cutting crime, reducing immigration and securing the UK from terrorism at the same time as reducing expenditure.
"Staff who make exceptional contributions to the work of the Home Office are eligible for special one-off payments - the majority of staff given payments during 2012/13, the year of the London Olympics, received less than £500."
Mark Serwotka, general secretary of the Public and Commercial Services union, said: "We are opposed to bonuses in the Civil Service as they are unfair, favour the highest paid and are often discriminatory.
"We believe the bonus system should be scrapped entirely and the money put into basic pay to give everyone a proper pay rise."