Cui Bonus?

[steepholm]

This poll is prompted by the recent fuss about Stephen Hester's bonus, but it's something I've often wondered about. Just how widespread is the practice of giving performance-related bonuses? We tend to hear about it in connection with bankers, and others who are already paid ridiculous amounts, but is it much more widespread? I can see the argument for incentives, but would find it strange if only rich people needed them, and only in the form of yet more money. While the rest of us are expected to do our jobs properly from a sense of professional pride, are only the rich venal and lazy enough to need a couple of extra million to get out of bed? Surely not!

ETA: I of course should have included "Self-employed" in the job options, as I know that applies to many here, but I guess that falls into the "Not that simple..." box.

[Poll #1815171]

Comments

[nightspore.livejournal.com]

In a sense, it's not that simple. When I get paid to give a talk, that's very vaguely a bonus for the part of the work I do which consists of writing. That would be maybe 1% a year of my salary, or a bit less.

In the US, the reason so much pay comes as bonuses is not that they're rewards but that they're tethers. Bankers and stockbrokers know secrets and have clients. If they got all they're income monthly, as salaries, they could leave for a competitor at any time. If 50% or more of their income comes only at the end of the year, they will be far less likely to move before the year is out. So really bonuses represent the part of your salary you would have to sacrifice if you moved elsewhere during the calendar year.

[steepholm.livejournal.com]

I don't consider being paid to give a talk a bonus, let along a performance-related one. It's a fee. By "performance-related bonus" I mean specifically rewards that come (at least nominally) as a result of meeting performance targets, or of exceeding expectations.

I can well believe that the tethering system you describe exists, but it seems to me that it isn't performance-related pay but rather deferred pay, and that it's dependent not on doing a good job but simply on not staying with the company.

[nightspore.livejournal.com]

On staying with the company, yes. Deferred pay, but only if you don't leave. (It probably gives businesses an option to get rid of people too and not pay them the deferred money, though one doesn't hear much about this.)

[steepholm.livejournal.com]

Sorry, I wrote 'not leaving' first time round, and screwed up the correction.