Because some industries or roles reward for exceeding your or your company targets e.g. Sales and should be awarded appropriately.
Payraise.. how much do you expect? how much did you get?
- Thread starter slinxy
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Because some industries or roles reward for exceeding your or your company targets e.g. Sales and should be awarded appropriately.
Soldato
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I think a lot of people go above and beyond and don't get any bonuses.
Sales is a bit of an odd one out because there's a direct link there.
But lets say you're in a project management role. Your job is to do everything possible for the success of that project -its what you're paid to do. So a bonus on top for doing it is an odd concept.
You could have two identical roles in two companies, one company expects X and gets Y so pays a bonus, and the other expects Y anyway so doesn't pay a bonus. Its a bit strange actually to expect X and pay a bonus for Y, when Y is what everyone should be giving anyway (you should try your best in any role and be rewarded for it in base salary - if you don't do as expected you get the sack).
Its interesting the different concepts in play.
But I think the most interesting aspect of it is the company culture one. So many companies just try whatever they can to keep salary costs down, which ends up with pathetic annual pay rises or relatively worthless token bonuses, or occasional redundancy rounds. Whereas a small number of companies budget to freely hand out 5 figure bonuses just for doing well in a job (which arguably you should be doing anyway).
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@danlightbulb :
You appear to be viewing the whole bonus thing very simplistically i.e. "why are people being rewarded over and above their base salary for just doing their job" - This is not the case. Bonuses are generally set on financial performance of the company (sometimes of individual departments within the company). If a company (or dept) over achieves on their financial targets then the staff SHOULD be rewarded. It is the responsibility of the company to set that target and levels of over-achievement. If they set it wrongly then that is the company's fault.
You appear to be viewing the whole bonus thing very simplistically i.e. "why are people being rewarded over and above their base salary for just doing their job" - This is not the case. Bonuses are generally set on financial performance of the company (sometimes of individual departments within the company). If a company (or dept) over achieves on their financial targets then the staff SHOULD be rewarded. It is the responsibility of the company to set that target and levels of over-achievement. If they set it wrongly then that is the company's fault.
Soldato
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I completely agree that staff should share in company performance. Lots of companies don't share any of this with their staff though do they, it is quite rare in the UK, which is a shame.
I think many companies would view a salaried staff member in the way I described though. I.e they pay for your 40 hours and if you outperform in that 40 hours why should you get extra?
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Serf mentality.
Where I work, the bonus is considered by the board to be sharing good results with the people who make it happen. Something all companies would do well to remember.
Sure... Then ust have a bunch of unengaged employees that do their job and nothing more. Someone is off sick, no picking up the slack. A deadline gets moved up, don't expect the staff to produce more than 40 hours of work for 40 hours pay and help the company out.... Silent Quitting I believe is the term?
Soldato
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I do agree that it would be nice to see more sharing of outperformance to staff of a company.
But the Board's obligation is to shareholders, to maximize their returns.
If company can get X results out of the staff and Y results out of the staff with bonuses, then one could argue the staff are underperforming unless there are bonuses available. Why aren't the staff giving their best anyway? I think it's a valid point actually.
Also need to remember the staff take little risk the other way. People with bonus deals wouldn't expect to give the company back some money if it underperforms its targets.
I think it's an interesting debate actually. Would I prefer to be paid slightly less with a chance of a bonus or have a higher base salary with no bonus?
Soldato
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If the staff aren't pulling their weight then wouldn't they be sacked?
How do you personally justify doing 40 hours work and producing 1000 units of output for £50k a year, when you're capable of producing 1200 units of output in the same time if there is a £10k bonus on the table? It just proves you aren't 100% productive normally.
It seems like you're doing your round and round in circles thing again and not listening to what anyone is saying.
1. Motivated work force. Trying at normal effort vs trying really hard produces different results. Sharing success is a big motivator.
2. Differentiate by performance. In a given job, there will always be higher and lower performers. Reward the higher performers. Many of these companies also do the opposite - if your performance is low you're at risk of being performance managed out.
3. Attract talent. Companies that are known for doing this will attract employees what want to be part of a high performance/high reward culture.
Soldato
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Oh I'm listening but no-one has been able to explain why people need a bonus to give 100%.
You could say that people only give 60% and a bonus incentivise giving 80%.
But if that is true then you could equally say that you aren't giving your maximum in the hours and pay you're contracted for. Shouldn't a company who is paying you expect to get the most out of you during your working hours? If you can do more for a bonus, clearly you aren't giving your best normally. There's really no way around that fact is there?
If giving bonuses is more effective at getting better performance out of employees, why don't all companies do that?
Instead of paying a nurse £30k, why don't we pay base £25k plus opportunity for £10k bonus based on performance?
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Do you give your utmost at work every hour of every day and go above and beyond to make sure your company is the best it can be, within and adjacent to your area of responsibility?
There are lots of reasons why a company might not do it. Off the top of my head:
- They can't afford it.
- They're not struggling to recruit great employees, so don't see the as much benefit (supply/demand).
- The leadership also isn't very high performing/motivated and doesn't care about promoting that kind of culture.
- Current owners care more about optimizing short term profits than long term success.
- They work in an industry where developing that culture makes less of a difference.
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Soldato
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No one can give 100% continuously obviously. But yeah I would say I put in a lot of effort to get the job done to a very high quality level as far as is possible, whereas others might just do enough to get by. That comes down to work ethic and desire to do a good job, and I suppose in my case has been rewarded in the sense that I've had a secure job for 25 years.
If I had a bonus available, it wouldn't change the quality or quantity of work I could do.
I think if someone is saying it does, then it inevitably means they aren't giving their best without it. That might be fine and a company can accept it and is willing to pay it anyway. But it's hard for me as someone with good work ethic to say I would do less if there was no bonus on the table because I do my best all the time.
If instead the bonus incentivised doing more hours, then that's different thing from productivity. Yeah if doing more hours it's fair to get paid more.
Points 3 and 4 are key I think. Point 1 should be irrelevant because bonuses should pay for themselves in productivity terms, otherwise no company would do it.
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Soldato
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Take this simple example.
Let's say you pay two teenagers £10 to clean your car on two separate occasions. Teenager 1 does a really good job, doesn't miss any spots. He is naturally a hard worker with good attention to detail and attitude. Teenager 2 does a worse job and misses bits, and takes twice as long because he keeps looking at his phone.
A few months later you do the same again but this time you say up front to the two boys that if they do a good job they'll get an extra tenner bonus. You get the same job out of teenager 1 as before because he already did his best. But this time teenager 2 also does a good job.
Paying bonuses is essentially choosing teenager 2 for the role over teenager 1. You're accepting that you'll only get the best results if you pay a bonus, whereas if you'd employed the best person for the job in the first place you'd have got the same result for cheaper from the better employee.
End result of this system = inefficiency.
Let's say you pay two teenagers £10 to clean your car on two separate occasions. Teenager 1 does a really good job, doesn't miss any spots. He is naturally a hard worker with good attention to detail and attitude. Teenager 2 does a worse job and misses bits, and takes twice as long because he keeps looking at his phone.
A few months later you do the same again but this time you say up front to the two boys that if they do a good job they'll get an extra tenner bonus. You get the same job out of teenager 1 as before because he already did his best. But this time teenager 2 also does a good job.
Paying bonuses is essentially choosing teenager 2 for the role over teenager 1. You're accepting that you'll only get the best results if you pay a bonus, whereas if you'd employed the best person for the job in the first place you'd have got the same result for cheaper from the better employee.
End result of this system = inefficiency.
Soldato
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So what you're saying is you've been overperforming relative to your pay for no reason, and making all the rest of us normal effort makers look bad
( 
)Honestly this conversation makes me feel a bit queasy. It should be OK to do your job and go home. I've overworked myself for years and I'm finally learning that there is no need to do that for a company. There is the personal satisfaction element but they way my job is right now, there's no reward for going above and beyond and the satisfaction is gone. So guess what, I do my job and go home on time. That's is normal and OK.
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So what you're saying is you've been overperforming relative to your pay for no reason, and making all the rest of us normal effort makers look bad
Honestly this conversation makes me feel a bit queasy. It should be OK to do your job and go home. I've overworked myself for years and I'm finally learning that there is no need to do that for a company. There is the personal satisfaction element but they way my job is right now, there's no reward for going above and beyond and the satisfaction is gone. So guess what, I do my job and go home on time. That's is normal and OK.
Re your first point I would say it's just not in my nature to deliberately shirk or perform at a lower level than my natural level. More fool me maybe.
I think if we're talking about doing more hours then sure, that's completely valid. Are we talking about a salaried role doing more hours, or are we talking about getting more out of a person within a fixed number of hours, which is different?
I think it's fine to do your job and go home. It's also fine to do more hours and get paid extra. Is it ok to get more done within your contracted hours and get paid extra? Not so sure because as I said it implies you're not giving your best.
Lots of roles do extra hours and don't get paid for them (eg teachers). Lots of roles are worked close to 100% capacity burning them out and not getting rewarded for it (eg nurses).
And then you have some workers in the news lately for actually being able to have a second job when working from home in another job!
It would be interesting to hear what people who have earned 5 figure bonuses have actually done extra for the money, and compare that to our own work and effort to see if it's really any different.
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Soldato
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Very difficult terminology here. Giving your best means different things to different people. I've given my best to all the "interesting" jobs I've had and consistently burned out. For others "giving your best" is a much more measured and tempered amount. Adding words like shirking highlights this, I'd have considered it slacking not to try my hardest all the time. I'm 37 now and frankly I don't want to work any more at all, because I've realised I give so much to it that I've got nothing left in me when I go home.
Good example with teachers Vs nurses. Both generally are giving more and rewarded less than they deserve. Teachers with lots of hours, nurses with intense effort. I would argue both are "over performing" or overcommitting. And those jobs are really important so I don't want to suggest they should do less, but maybe they should be rewarded better/taken care of.
@danlightbulb
I’m not sure what line of work your in but every role I’ve had in a private company has always had a bonus as part of the total compensation package.
We need to step away from everyone gives a 100% a 100% of the time, cos I’ll be honest.. I don’t give 100%.
There is a level of expectation of performance, not output that companies expect from their employees. A good employee and manager will measure that fairly and should reward it fairly…
removing money away from the scenario. Say they was three employees that was given the same task to do, that the company thinks it should be done in 6 hours..
The first one, no able to do it in the allotted time takes 8 hours.. that’s 6 hours of “work” and the other 2 hours should be considered as training.
The second person does the task in 6 hours… that is normal..
The third that is really good at the task does it in 4 hours, then they are allowed to take the extra two hours off as their bonus.
Not everyone’s skill set, ability or experience is the same.. some are better at some tasks than others and some have zero experience in some tasks.
The reason why I believe bonuses are better than straight out pay raises is that.. if person out performs expectations one year.. they get the flat pay raises of 2.5% plus another 2.5% for their over performance. Next year the same person will need to perform at the same level just to get get the flat pay raise to keep up with the cost of living. Any underperforming can not be deducted, they would have to over over perform again to get an over performance pay raise.
If this was a case of of bonuses, they could get the 2.5% flat pay raise and a bonus of 5%.. if they did their role as normal next year then it’s just the flat pay raise. If they did worst, it’s up to review board.. if they did better then it’s another bonus depending on how much they over performed.
I’m not sure what line of work your in but every role I’ve had in a private company has always had a bonus as part of the total compensation package.
We need to step away from everyone gives a 100% a 100% of the time, cos I’ll be honest.. I don’t give 100%.
There is a level of expectation of performance, not output that companies expect from their employees. A good employee and manager will measure that fairly and should reward it fairly…
removing money away from the scenario. Say they was three employees that was given the same task to do, that the company thinks it should be done in 6 hours..
The first one, no able to do it in the allotted time takes 8 hours.. that’s 6 hours of “work” and the other 2 hours should be considered as training.
The second person does the task in 6 hours… that is normal..
The third that is really good at the task does it in 4 hours, then they are allowed to take the extra two hours off as their bonus.
Not everyone’s skill set, ability or experience is the same.. some are better at some tasks than others and some have zero experience in some tasks.
The reason why I believe bonuses are better than straight out pay raises is that.. if person out performs expectations one year.. they get the flat pay raises of 2.5% plus another 2.5% for their over performance. Next year the same person will need to perform at the same level just to get get the flat pay raise to keep up with the cost of living. Any underperforming can not be deducted, they would have to over over perform again to get an over performance pay raise.
If this was a case of of bonuses, they could get the 2.5% flat pay raise and a bonus of 5%.. if they did their role as normal next year then it’s just the flat pay raise. If they did worst, it’s up to review board.. if they did better then it’s another bonus depending on how much they over performed.
Not all companies do this though - the one I work for has set salaries per job level which increases with service all the way up to country CEOs. No bonus payments made however if you do badly they fire you or demote maybe. If you do well you can keep your job .. may be! Performance management is harder and reliant on KPIs. In my opinion bonuses are good for certain jobs with clear and profitable outputs to keep people motivated and everyone winning - e.g. car salesman but becomes a blagging exercise for other jobs - especially back office/project work etc. What happens when you have a good PM pushing a bad product vs bad PM working on an easy deliverable. Also some managers just want to be nice to everyone and pay them regardless of performance!
Essentially zero downtime. You yourself stated:
I did give it and, because of this, the dept (which I was overall manager for) smashed every target and metric that was set by Head Office. I got rewarded with a large bonus which was a drop in the ocean to the extra revenue/profit I and my team brought in.
If you think that was just me "doing my job and giving max effort" which is what my base salary is for then perhaps, as you admit to not giving 100%, you should get a reduction in your salary for underperforming.
Companies should understand that the carrot is better than the stick approach when it comes to motivation.
I personally feel that this is one of the issues of the UK public selector. They tend to keep the wrong staff, who will just underperform and get the same payraises as others, as why do more? you may get promoted if/when a higher position becomes available but that maybe sometime never and the staff do perform well get fed up and leave for more money.