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HUMAN RESOURCES

Are your bonuses taken for granted?

As summer time and holiday travel arrive, so do midyear bonuses. These bonuses, often called "holiday money", come as a form of appreciation of the work performance and effort of employees. However, more and more often we are hearing employers complain that the thirteenth and/or fourteenth salaries are taken for granted by employees who seem to expect and demand them as an inseparable part of their compensation package.
How is it possible that the summer and Christmas bonuses are losing their motivational strength and are increasingly a source of dissatisfaction and grievance?
The reason may really be hidden in the fact that people have become used to getting these bonuses no matter what the performance of the individual employees or the organisation as a whole. The other day I heard a union representative on television claiming that they had succeeded in negotiating a thirteenth salary that would not be linked to performance! If not to performance then to what should a bonus be linked? When people hear these things frequently, then what originally was thought to be a motivational tool turns out to be an 8% pay rise. This naturally devalues the bonus and dents its motivational strength.


Stanislava Luptáková

As summer time and holiday travel arrive, so do midyear bonuses. These bonuses, often called "holiday money", come as a form of appreciation of the work performance and effort of employees. However, more and more often we are hearing employers complain that the thirteenth and/or fourteenth salaries are taken for granted by employees who seem to expect and demand them as an inseparable part of their compensation package.

How is it possible that the summer and Christmas bonuses are losing their motivational strength and are increasingly a source of dissatisfaction and grievance?

The reason may really be hidden in the fact that people have become used to getting these bonuses no matter what the performance of the individual employees or the organisation as a whole. The other day I heard a union representative on television claiming that they had succeeded in negotiating a thirteenth salary that would not be linked to performance! If not to performance then to what should a bonus be linked? When people hear these things frequently, then what originally was thought to be a motivational tool turns out to be an 8% pay rise. This naturally devalues the bonus and dents its motivational strength.

The change in the perception of the thirteenth and fourteenth salaries may also be due to the fact that people expect something that has been given to them for many years without specifying why, when and for what they were being awarded the money. Communication plays a vital part in this situation, since it is important for any human resource tool to be understood in order to be motivational.

What purpose then does communication serve in this case? Is it telling people that they should not expect the bonuses? Or telling them how much each and every one is getting? Well, not quite. Communication in this situation is the link between all human resource activities that are carried out on a regular basis and can therefore have a supportive and motivational function. It is also the formal set of rules and procedures within the organisation.

To be more specific, people should understand under what conditions they will or will not get the bonus, and what behavior and attitudes are expected from them. They can take this from their job description, performance appraisal and from offered or recommended training. Performance appraisal as a form of feedback to employees on their work performance is an especially strong tool in the hands of human resource managers, as it not only evaluates past performance, strengths and weaknesses of the individual and their contribution to the organisation, but can also define future steps and goals for employees. The direct link between performance and the paycheck reinforces the motivational aspect of the bonuses received. The employees not only understand why they are getting the bonus but they also attach more weight to it.

Of course, the link between performance appraisal and compensation depends on the nature of the performance appraisal method used, as some appraisals are more suitable only as a source of feedback. Regardless of its nature, performance appraisal works as a mirror for employees' efforts. In such cases other activities, such as bonuses or training given to employees, are understood only in the way a company wants them to be perceived.


Stanislava Luptáková is a lecturer at Comenius University's Faculty of Management. Her column appears monthly. Send comments or questions to Stanislava.Luptakova@fm.uniba.sk.

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