Comments on: Is a bonus better than a raise? http://www.successfactors.com/blogs/business-execution/is-a-bonus-better-than-a-raise/ Execution is the Difference. Tue, 17 Nov 2009 01:55:50 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Bill Kersey http://www.successfactors.com/blogs/business-execution/is-a-bonus-better-than-a-raise/comment-page-1/#comment-186 Bill Kersey Fri, 15 Sep 2006 01:08:56 +0000 http://10.50.0.97/wordpress/workforce-performance/index.php/is-a-bonus-better-than-a-raise/#comment-186 Merit increases that include performance ratings address the issue of the "right people". A matrix system based on performance rating and comp ratio is finding favor in the retail industry. Merit increases that include performance ratings address the issue of the “right people”. A matrix system based on performance rating and comp ratio is finding favor in the retail industry.

]]> By: Madan http://www.successfactors.com/blogs/business-execution/is-a-bonus-better-than-a-raise/comment-page-1/#comment-185 Madan Wed, 06 Sep 2006 10:26:27 +0000 http://10.50.0.97/wordpress/workforce-performance/index.php/is-a-bonus-better-than-a-raise/#comment-185 One must be kidding to think that merit increases in this age of global competition should exceed that on inflation etc. You want to give merit hikes to thos folks who matter, not to every TDH..most managers and most companies peanut butter their increases to include as many people as possible, that means the best of the best get almost the same as the mediocer and the also-rans..i am glad that there is a shift to bonus based pay, atleast there is some consideration given to high performers. Remember that people are not your most important assests, the "right people" are! One must be kidding to think that merit increases in this age of global competition should exceed that on inflation etc. You want to give merit hikes to thos folks who matter, not to every TDH..most managers and most companies peanut butter their increases to include as many people as possible, that means the best of the best get almost the same as the mediocer and the also-rans..i am glad that there is a shift to bonus based pay, atleast there is some consideration given to high performers. Remember that people are not your most important assests, the “right people” are!

]]> By: Frank http://www.successfactors.com/blogs/business-execution/is-a-bonus-better-than-a-raise/comment-page-1/#comment-184 Frank Tue, 29 Aug 2006 23:15:23 +0000 http://10.50.0.97/wordpress/workforce-performance/index.php/is-a-bonus-better-than-a-raise/#comment-184 One thing that needs to be made clear is the difference between merit increases and cost-of-living adjustements (COLAs). This is the one area where the US Federal Government is actually doing something right with regimented payscales that explain the difference between pay increases and inflationary adjustments to employees. The way the federal government GS schedule works, all pay grades are given a COLA. Then, employees might be moved up steps within their pay grade depending on "merit." Since there is an average of 3% inflation per year, all employees expect an increase in pay that is at or better than inflation--anything less and you are effectively earning less money. Bonuses are nice, but they are not a given. Like stock options, they are a compensatory bet that the employee makes on the company. If done right with clear criteria for getting the bonus that is weighted towards the individual employee's performance, this is good thing--because you are effectively betting on yourself. However, most employees at least want a COLA to help "hedge our bets." One thing that needs to be made clear is the difference between merit increases and cost-of-living adjustements (COLAs). This is the one area where the US Federal Government is actually doing something right with regimented payscales that explain the difference between pay increases and inflationary adjustments to employees. The way the federal government GS schedule works, all pay grades are given a COLA. Then, employees might be moved up steps within their pay grade depending on “merit.”

Since there is an average of 3% inflation per year, all employees expect an increase in pay that is at or better than inflation–anything less and you are effectively earning less money.

Bonuses are nice, but they are not a given. Like stock options, they are a compensatory bet that the employee makes on the company. If done right with clear criteria for getting the bonus that is weighted towards the individual employee’s performance, this is good thing–because you are effectively betting on yourself. However, most employees at least want a COLA to help “hedge our bets.”

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