Getting ready for that year-end bonus, heh? Maybe you've already spent it in anticipation. Oh, it comes in mighty handy. Two years ago, paid for that new upholstery and those lovely curtains in the dining room; last year, for that new shower stall.
You don't know the size of this year's bonus, but it's usually around 1 to 3 percent of your annual salary. Might be more in a year when the company is doing extremely well. You figure a bit less this year. I mean, face it, business hasn't been all that hot.
Well, I hate to break it to you like this. Don't be surprised if there's no year-end bonus this year. Oh yes -- the company might give you something to show its appreciation for all the extra work you put after half the people in your department were sacked, and you had to do their jobs. But instead of a bonus it'll be a coupon to a local restaurant, or gift certificate for all-night bowling.
American companies are on a rampage of cost-cutting. Profits are down, investors are seething, competition is intense, consumers won't spend an extra dime. All this means everything is on the chopping block -- including year-end bonuses.
And that's okay. Year-end bonuses don't work, anyway. Their old strategic purpose was to recognize certain employees for exceptional performance, and that way give everyone an incentive to do better. But bonuses have become so common employees regard them as a right. Most don't even know how they're calculated.
When the bonuses are low or non-existent, as they'll be this year, many employees feel cheated. Even under normal times, it can appear management is unfairly favoring some employees over others. And because bonuses come in a lump sum at the end of the year, they don't really motivate employees all year long.
Better to give employees paychecks that reflect their ongoing value to the company. Throw in a profit-sharing plan so employees have a real stake in the company's performance every quarter. But this year and in the future, forget that year-end bonus. It's so ... nineties.
