The Bonus Debate

The Bonus Debate


Mark is an Account Manager at an advertising firm. He has been working there for five years. His job is to manage clients, which includes; project management, billing, correspondence and generally making sure that the client is happy and satisfied. He does a good job, meaning he does what he is employed to do; he has even been promoted once. Mark says he enjoys his job. For the last four years, there has been a standard salary increase of between ten to twenty percent for all staff at the company and bonuses have always been paid. This year Mark received neither a salary increase nor a bonus. Because of his previous history, he was expecting it and had even planned around it, even though he knew the business environment had been tough. He is single and doesn’t really have any dependents. He spends his money on basics like food, rent, utilities and phone bills. He tithes ten percent. He also has a car loan that he is paying off and credit card expenses every so often. He dabbles in the stock market every so often. Other than these, entertainment expenses like going out, internet, TV etc. are what consume his money. He loves rugby and follows it keenly. He has gone on several trips locally and internationally. This is what usually gets him in trouble and racks up his credit card bills. He has not had much success planning for them and so he was intending to pay at least a portion of the balance with his bonus. As you can imagine at the moment, Mark is not too impressed with his employer and said as much to his immediate supervisor. This is the ignorant way a lot of people approach bonuses. It becomes an entitlement, without which one feels like they have been short-changed. The word bonus implies reward, unexpected and extra. Did Mark really evaluate whether his performance and current operating environment of the company justified rewards? Let us look at it.

First of all, Mark’s motive for the bonus is really not work related. He is frustrated because he now cannot pay off his credit card as he wanted. Can you imagine what employers would have to go through if they had to consider everybody’s personal financial issues? No business would get done. Mark’s lifestyle and credit card bills are not and should not be the responsibility of the company. The employer is therefore not responsible for paying bonuses for Mark to pay off his card. Think about it this way. Say you went to buy bread. You get to the shop, find bread but it appears not as fresh as you like it so you decide not to buy it. Imagine if the shopkeeper begged you to just buy it so that he or she can afford to go on holiday? You would conclude that the the bread you want and the shopkeepers holiday are two separate things. It would be great if the bread was fresh and the shopkeeper did go on holiday but it just wasn’t and either way, the holiday was never your responsibility. People make this same crucial mistake with salary increments. A lot of us justify increments because of inflation. We want raises because rent, bills, school fees, lifestyle etc. have gone up. It’s hard when expenses rise but it is still not the employer’s responsibility.

Secondly, it is important to evaluate why bonuses are paid (Click to Tweet this). Mark’s firm cannot pay what they do not actually have. Bonuses are not an entitlement. They are rewards for effort and results that are over and above the norm. Most business owners want to keep their staff happy and give increments and bonuses but at times they actually can’t. For many businesses, the fact that they have managed to retain jobs is a blessing. As we have all seen many companies are retrenching as they face realities of various business cycles. Bonuses are also a factor of personal effort. Mark did not really talk about why he should be paid a bonus. He just expected it. If you want to be paid a bonus or earn more money, you need to be intentional. You will not be paid just because you think you should be paid. There is nobody on this planet who does not think that they should earn more. Most people like Mark feel entitled or it could be that the company you work for has a history of these payments. There are fewer people actually making a plan to be paid more i.e. specific actions. If you want to earn more in a years’ time, also think about what you have to do and achieve to justify the increase. You do not earn more by doing the same thing (and sometimes less) and hoping someone is unaware enough to pay you.

Mark’s employer should have also taken the time to communicate properly that bonuses were not just being paid. He or she should have taken time to make people understand the underlying reasons.  Especially if there has been a history of regular payment, it was not abnormal of Mark to expect it even though he should have realised that things were different. There could have been an opportunity for him to be more proactive in his personal role to justify this bonus. The people who outperform will always be a priority. It is great to get a bonus but be intentional about it.  Play your part in earning it. Be conscious of the environment in which your employer is operating. Remember it is not an entitlement.

Waceke runs Personal Finance and Wealth Creation Courses. For details, do get in touch at Facebook/WacekeNduati| Twitter@cekenduati

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