Why have bonuses?

I’ve never understood the idea of a bonus.
It seems from listening to the media, a bonus is a reflection of a job well done.Doesn’t that make a mockery of a wage.

Its carrot instead of stick. No bonuses in my place just performance managment or bullying in laymans terms.

you can look at it differently though eg the bonus plus basic is the real salary but you only get that if you perform to your targets which seems reasonable to me.

The real issue is whether people are worth that ‘real salary’. Some are some aren’t.

Oh and if performance management is bullying then it isn’t performance management. Proper PM should be a good thing for the employee. Sounds like your company has crap management.

It’s just a posh word for a tip.
And thus in common with waitresses their wage is often a mockery.

IME bonuses/comissions are only a good idea if the target is achievable, otherwise people get so demotivated they just resign themselves to not getting them and productivity and morale takes a kicking which is an ever descending spiral.

However if the ‘carrot’ is within reach and everyone is hitting the targets, the morale is through the roof and folk enjoy coming to work.

Sadly im currently in the former situation.

Are bonuses subject to income tax?

Makes it easier not to pay someone if they’re sh1te – didn’t make your target? then we’re only paying you a pittance.

In theory.

yes, cougar, just like normal salary

Yes – it’s not a tax scam. Bonuses are subject to tax.*

* Might be a CGT tax angle if they’re shares?

A bonus is good IMO.

If you put in the effort you get rewarder for it (i.e OT and going the extra) but if you sit on your ass and do the bare minimum (or less) then you don’t get one.

A wage is for doing a job. A bonus is for doing more than that, going above and beyond what is simply required. If you think everybody should try and excell in their work I don’t think it will happen but fine. I you think everybody does try their hardest, therefore nobody needs rewarding for notably greater effort and results then I think you are wrong.
Of course it isn’t suitable for all jobs, and it doesn’t remove the need to deal with people who are taking the piss.
Oh, and no bonuses available at my work.

A wage is for doing a job. A bonus is for doing
more than that, going above and beyond

Sometimes. sometimes not.

Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

Cool, I’m superrich!!!

Ah. Bother. Seems that people other than the superrich can also have bonuses.

“Oh and if performance management is bullying then it isn’t performance management. Proper PM should be a good thing for the employee. Sounds like your company has crap management.”

Clubber you’ve hit the nail on the head.

If we have spent 45 billion bailing out a bank and a bonus will tempt the best to run it and give us a fighting chance of recouping our money, then I’m all for it.

Unfortunately the small minded compatriots don’t.

Usually bonuses or ‘performance related pay’ is brought in to reduce the overall wage bill of an organisation, disrupt a previously well understood and cohesive wage structure and to introduce suspision and doubt into a workplace where these things didn’t previously exist.

Often brought in to stable working environments to foster an element of ‘divide and conquer’ and to obfusticate previously transparent wage negotiations.

Gives far more power to the management and can destabilise a previously happy team.

Takes power away from those who understand how a business actually operates and puts it into the hands of those who have been employed purely in pointlessly unnecessary administrative tasks.

It’s another example of the illusion of choice designed to screw the majority whilst telling them they should be grateful.

See also acadamy schools, internal NHS markets, impenetrable mobile phone contracts, pricing structure of train tickets etc etc….

So TJ, all bonuses are wrong even if applied as I suggested? Or is it really just the issue of whether they’re actually merited?

Seems that people other than the superrich can also have bonuses

No. That is not true, for He hath spaken, and the word was made FACT!

Guy on the news said that nobody would volunteer to be the CEO of RBS for that sort of money

I could almost hear half the country shouting “I WOULD”

Errmm- how about reading / quoting what I actually said?

Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

So, as I get a bonus, am I “superrich”? Am I somehow not one of the “lessor mortals”?

Wrong on both counts, TJ.

I get a bonus for giving 110%.

Errmm- how about reading / quoting what I actually said?

TandemJeremy – Member
Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

POSTED 10 MINUTES AGO # REPORT-POST

So unless I’ve completely misunderstood you, you state that lessor mortals don’t need to be motivated by having money thrown at them, which in the context of this thread means they don’t get bonuses.

Which means I’m a lessor mortal, sadly. As I have a bonus. Even more sadly the bloody bonus is a complete con, seeing as I (realistically) can only ever get 80% of it.

Hmmn, as I said in a previous thread TJ, the ‘pay peanuts, get monkeys’ line only seems to apply to those already earning way above median wage.

Bonuses may be relevant if you are already earning a secure, liveable basic wage.
When applied to a meagre basic salary, they are a form of control and manipulation.

Which is just as the likes of Flashy would have it.

Interesting that by declining the bonus Hester has deprived HMRC of nearly half a million quid of tax revenue.

Is it, Rusty? Is it really?

Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

Have you ever considered that these people, I assume by super rich you’re not referring to lottery winners, also have a great deal of power and responsibility? Lesser mortals can not bring in the same level of return.

NewRetroTom – Member

Interesting that by declining the bonus Hester has deprived HMRC of nearly half a million quid of tax revenueIf he’s worth his salary & bonus I’d expect he’d have paid about 150 quid in tax last year, all in

Whats that wooshing noise?

I thought the sarcasm would be obvious.

We are often told as in the case of the RBS that these massive bonuses have to be paid to attract the best talent.

The same people will then tell us that improving salaries and conditions for public service workers is not needed when there are recruitment shortages.

Basically pointing out the massive hypocicy at the base of this

Apparently the superrich need motivating by throwning money at them. strangely this does not appear to be true for lessor mortals

Actually TJ there may be more truth in that than you realise. Most people are not motivated by money other than to simply provide for their families. In that sense, sure everyone is very concerned with money, but that’s not quite the same thing as being motivated by it.

It seems like a side argument but the whole bonus thing, Simon Hester etc etc etc – really, I couldn’t care less how much he and other bankers get paid. I made my choice they made theirs.

Do you think Simon Hester knows who his kids are? Do you think he gets up with them in the morning, has breakfast before arriving at the office at 9am and leaving at 5.30pm to then give them a kiss goodnight?

I do and there isn’t a sum of money in the world for which I would give that up for. But then I don’t earn £1m+.

CaptainFlashheart – Member

Is it, Rusty? Is it really?

Yes it is.

When you do a job where your idea of basic customer service, the minumum service that the customer is entitled to expect is in direct conflict with a management dedicated to driving down costs, then bonuses can be used as a threat.

You can either treat your customers in a decent and reasonable manner or you can earn your bonus.

When you depend on that bonus to pay your bills and feed yourself, because your risable basic wage is insufficient for that purpose, then many compromise their standards and take the money.

We are often told as in the case of the RBS that these massive bonuses have to be paid to attract the best talent.

Yes I heard this repeated on the radio this morning. Apparently because banking is ‘global’ we have to pay a lot to get the best.
What struck me as odd was that most of the ‘best’ seemed have come from the UK in the first place.
Surely if it’s truly global we must be able to outsource from somewhere with lower wage costs like China or India and still get the same intellect.

TJ, you appear to want to say that everyone is motivated by money, which clearly isn’t the case.
As a salesman on 12k per year, I was offered bonuses and commission. My sister who is a public health worker and had the same oportunities and choices as me was also as jealous as you. I’ve never undersdtood it. If I wanted people to love me for my humanistic side I would be happy hiring and firing people. Feel the power.

So, that’s exactly how I’d like it to be, is it? Intriguing. Wrong, but intriguing.

Answer the points raised Flashy.

Am I right in thinking that if whotsisname gets nearly one million squids as a bonus then he pays 40% tax on that?

Why? You already know what I think and want, apparently. So, why waste my time?

CaptainFlashheart – Member

Why? You already know what I think and want, apparently. So, why waste my time?

Ah.

The Eton defence. “Shan’t, so ya!”

Answer the points raised, just so we know where you stand.
I’m prepared to offer you the same courtesy.

Am I right in thinking that if whotsisname gets nearly one million squids as a bonus then he pays 40% tax on that?

That bonus was going to be paid in shares. I’m not sure whether they were share options or shares, I think the latter. If that’s the case then when he sold them he would likely pay 40% on the value at which they were issued to him at and then capital gains on anything above that, so what 30%? I think that’s how it works, I am making an educated guess if I’m honest.

If they were just shares options, then you don’t own the shares, just the right to sell them. If that is at a profit you keep the difference and pay cap gains on that, which if you’re a higher rate tax payer is cheaper tax wise.