5 Myths about Bonus Pay

1) Bonus Pay is a reward for doing a good job

This myth is perpetuated by upper level management who give the idea, that if everyone works really hard you will get a bonus cheque for your hard work. It is an 'incentitive reward'

The reality, however, is that a company will only consider bonus pays if a) the company made a profit and b) their is leftover money after the profit that can be given back to employees.

Although there is a relationship between hardwork and profitibility. It is not a gaurentee, everyone in the entire company can be working their best, but the company still may not have enough business to make a profit, so they can't give you a bonus.

2) Bonus Pay is to be expected

The Myth:

If you hit (or exceed) the targets given to you by your manager, you can fully expect to recieve your bonus. You can count on it; and assume it in your budget.

The Reality:

In a perfect world, if everyone meets his/her targets, the company will make a profit and will be able to give some of it to you as a bonus. It is very rare for most business that everyone will meet their targets, and the bonus cannot be paid out.

In the "real" world bonus money is like winning the lottery. If you continue to work long enough (weather hard or not), it becomes increasily likely at some point you will get at least one bonus pay.

But think about it; when you are trying to plan your expenses for next month, do you write in "Lottery Winnings:" as expected income?, and neither should you write in Bonus Pay, no matter how much your manager is 'sure' you will get it !!!

3) If you don't get your Bonus Pay it means you should work harder to get it

Okay, perhaps I am just repeating myself, but again, the company needs to make a profit (probaby a very good profit) to consider paying out a bonus. The companies profit is dependant upon many factors such as the market, time of year, labour paid out to employees, office expenses, and other factors that you may have no control of whatsoever. You could work 40 hours / week or 120 hours / week, but at the end of the day if the company makes no money; neither will you.

4)Bonus Pay is your responsiblity alone

One key incredient to getting a bonus is the efficiency of the team to work well together, if everyone is actively involved and working to the same goal (increasing profitability) , then it is more likely to get bonus pay. Just because you don't get it, doesn't mean you didn't do a good job, it means the sum of everyone didn't perform.

To some extent we all have a responsiblity to help the company move forward, and we all take a 'hit' when screw ups happen. You're not in this alone, and neither is your bonus pay.

Bottom Line: Don't ever ever expect your bonus pay !