Bonus removed after 2 years

[Puggit]

I've been working for a startup since 2010 (well it was a startup then, now doing very well). At the end of 2010 instead of a review and payrise the director of my department gave some team members an extra opportunity to earn commission. This amounted to around a generous 7% pay rise (OTE). This bonus commission was also awarded for 2012 without further correspondance.

Fast forward to now and I've recently receive my commission plan for 2013, and as you've already guessed this item is missing. Nothing has been communicated but when I recently met up with my director (which is rare as he lives in another EMEA country) he confirmed that the bonus is no more and 'wasn't it nice when it existed?'

Obviously receiving a 7% pay cut is not a pleasant experience (and there are some other factors which make reaching normal OTE harder). Do I have any recourse or is it a suck it up, it was good while it lasted thing?

Thanks

[Mandat]

Was the bonus contractual or discretionary?

[Puggit]

Mandat said:

Was the bonus contractual or discretionary?

Discretionary, sadly.

I'm expecting to have to suck it up - but a 7% pay cut in a very successful company grates. I will have a word with HR and register my unhappiness.

Edited by Puggit on Monday 4th February 10:51

[rog007]

Whilst no comfort to you, this is an example of one of the unintended consequences of utilising bonuses in reward schemes; they become expected and when not awarded create unhappy employees. It's much better to pay a fair days pay for a fair days work.

[Mattt]

Yeah, "if-then" rewards aren't a great way of structuring incentives in the long run.

[Puggit]

To make matters more sore, the extra bonus was paid on sales outside of my targeted area (as an incentive to assist in these areas). I've recently had my territory changed somewhat (losing a top performing area and gaining a badly performing area). During this quarter I'm being asked to carry on helping with the sales process inside my old area, with no recognition or revenue from it.

[Odie]

Puggit said:

During this quarter I'm being asked to carry on helping with the sales process inside my old area, with no recognition or revenue from it.

Dont find the time to help, make extra effort in the new challenging area. Justify why you dont have the time with the projected/actual profit growth in your area of challenge.

[Jasandjules]

Puggit said:

To make matters more sore, the extra bonus was paid on sales outside of my targeted area (as an incentive to assist in these areas). I've recently had my territory changed somewhat (losing a top performing area and gaining a badly performing area). During this quarter I'm being asked to carry on helping with the sales process inside my old area, with no recognition or revenue from it.

Time to start looking elsewhere on the quiet.

You could also politely inform your director of the above so you are losing quite a lot overall...

[johnfm]

Find another job.

[Puggit]

johnfm said:

Find another job.

I'm friends with the HR director, so I've let her know that's the likely outcome.

One-to-one with my manager on Monday...

[Jasandjules]

Take a dictaphone. In a pocket....

[Puggit]

Jasandjules said:

Take a dictaphone. In a pocket....

It's on Skype

[MitchT]

Where I work we used to get a generous bonus. They decided to replace this with a smaller bonus and a pay rise to offset the loss. Last year was a bumper year as we got the new higher pay plus the old higher bonus as the bonus is calculated on the previous year's financials. This year we would expect to receive lower overall pay than in 2012 as the new, lower, bonus would kick in. However, adding this year's bonus to this year's pay and then doing the same for 2011 - i.e., before the new system started to be implemented - there's still a fall. I'll be paid some 2% less this year than I was in 2011. Bear in mind that I have to set aside approximately 30% more to cover the bills than I did this time two years ago and I'm understandably miffed! They probably just thought we'd expect a drop compared with 2012 and not give it a second thought. I looked back a year further.

[Kermit power]

rog007 said:

Whilst no comfort to you, this is an example of one of the unintended consequences of utilising bonuses in reward schemes; they become expected and when not awarded create unhappy employees. It's much better to pay a fair days pay for a fair days work.

I think that depends on how easily measurable performance is. If you're a sales bod with a clearly defined target, then it's perfectly reasonable to have a commission plan contributing maybe 50% of OTE. Blow your number, make a fortune... Fail to get off the mark, be bloody glad if you've still got a job, and equally glad for your basic!

With sellers, it's making sure the structure of the plan is fair and consistent (which seems to be lacking for the OP here) which is vital, rather than the actual fact of paying it.

For people in fluffier roles with much less clearly defined metrics, however, I'd agree with you.

[Terminator X]

Puggit said:

Mandat said:

Was the bonus contractual or discretionary?

Discretionary, sadly.

I'm expecting to have to suck it up - but a 7% pay cut in a very successful company grates. I will have a word with HR and register my unhappiness.

Edited by Puggit on Monday 4th February 10:51

The company that I used to work for stopped paying bonuses in 2008 yet they still had funds to employ new people on generous salaries, buy up smaller companies, purchase offices all over the World and still make a good profit. I left.

TX.

[Puggit]

Well - just had my one to one, and my boss has informed me that not only have I lost the discretionary bonus (apparently it was a one off for 2011, I was given it accidentally in 2012) but that my target isn't the one I've been given.

Oh no, it's not 150% of the 2012 achieved number, it's 192%.

Message received loud and clear.

[blindswelledrat]

Sympathies.
Well youll be better off elsewhere.

[Jasandjules]

Puggit said:

Message received loud and clear.

CV written....