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When is a bonus ever just that, a bonus?

by Will Dawson August 31, 2011

Competitive Salary plus bonus and benefits…

A pretty common sight on job boards across the land. The bonus is a powerful incentive to motivate and ultimately reward employees. A package without a bonus is typically seen as unattractive to a high flier, but the bonus comes many different shapes and sizes.

So where am I going with this? I was reading yesterday in The Times about the shareholder ‘revolt’ at the mining company Xstrata over executive pay for the second year running. I am not an expert in Board level remuneration, and there are firms such as Hay and Towers Watson who have practices that specialise in compensation and benefits. However, as we emerge from the recession, there does seem a notion that bonuses might start becoming just that, a bonus to reward individuals based on their personal performance and that of the company.

With many companies having not paid bonuses in 2009, this does provide an interesting conversation when it comes to salary negotiations with our candidates. There has to be a certain amount of expectation realignment for people who are seeking to negotiate a salary increase based on expectations on what they could have earned if they had got full bonuses etc, rather than on what they actually earned.

It is worth noting that I am a huge fan of bonuses in the right context, and it is indeed one of the ways that we here at FreshMinds are incentivised. But it is not a right nor can it be guaranteed in this market, so perhaps a fresh and realistic approach to the bonus will stop it being an elusive carrot keeping people in the wrong job, nor a dealbreaker stopping people taking the leap into the best move they ever made…

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