To think I might have to kiss my "bonus" goodbye?

[Usedphone]

Long story short, I started my new job 4 months ago. It's been fantastic and I'm really happy. I also managed to negotiate a bonus , even though nobody else receives one. The MD said that they'd implement across the whole company in the new year.

Fast forward and we've got a new hire and they don't have a bonus! Mine is in the offer letter, but the contract actually says it's discretionary.

I'll still ask about it once I pass my probation but I'm not super hopeful!

Is the new hire doing your same role? If so, that might be that their role does not get a bonus but yours does.

Are there lots of people doing your same role such that if you get a bonus, all of them should also for fairness? If you are the only person doing your role, then it is still possible they will give you bonus even if the bonus is not implemented for the rest of the company.

What percentage of your pay do you expect the bonus to comprise? There is a difference between 3% and 20% or more. I would not expect a bonus at your company to be generous given that they have not been paying it prior to you joining.

The best way to get that bonus is to focus on doing a cracking job (within your control) rather than asking about the bonus and if the company does well.

If its guaranteed and in your offer letter you should get it. Presumably you and this new hire have different compensation packages, so regardless of what they receive - you negotiated it, you have it in writing as part of your offer, you should receive it. You might need to push for it though.

Was part of the negotiations agreeing the terms of the bonus i.e. meeting stretch targets? Presumably that was put in writing somewhere? No discretionary bonus is guaranteed, but if your contract refers to a bonus and the criteria for it, and you’ve met those criteria, you’re in a strong position to argue its award.

As an aside, if nobody else is receiving a bonus, I think this is going to become a very dysfunctional and disgruntled workplace very quickly. Keep your eyes open. There’s no way I’d agree to work somewhere where I was the only employee awarded a bonus, it’s a direct route to an awful atmosphere with your colleagues.

A few quick replies:

*I'm actually his line manager (but I wasn't part of the compensation package conversation, but I know they argued for a higher salary as the basic one isn't super competitive).

*The bonus is 15% which would put me back at a "decent" but not competitive salary range for my type of role.

*The prerequisites to get my bonus aren't mentioned anywhere, as it was always said that we'd develop this, as it would become a wider conversation for the whole company.

*Contract does say they can remove the variable element at their discretion.

*My contract (and this compensation package) was negotiated before our company was absorbed by the bigger parent company.

If it says discretionary, surely that means it isn't guaranteed?

Well yes and no. I would expect that a bonus would be up to me and my performance, so an incentive.

My company completely removing from my compensation package would seem more like bait and switch.

I certainly wouldn't count on it materialising. I'd asked though

Sadly I agree

You need to begin the conversation now about setting out some targets for your bonus, and a timeline for these and receiving the bonus. Without this, if all your contract says is that your remuneration is to include a discretionary bonus, with nothing set out as to what that discretion is or what the KPIs / criteria are for receiving it, you’re in a fairly weak position. “The company didn’t turn over as much as we hoped this year” or “you haven’t been employed long enough yet for us to be confident in your ongoing capability” is ultimately all the reasoning management need to give for not awarding it.

That reads as a pretty toxic workplace environment. I'm all for knowing your worth, and if you had set targets you needed to reach to achieve your bonus, then fair enough. But to not offer the same to other employees seems a bit off. If they do implement it company-wide, fair enough. I'd be cautious given they used the word discretionary though - I think as a PP has said, I'd ask exactly what targets etc. they wanted you to reach for you to be given the bonus. Whilst bonuses are very gratefully received, no company I've worked at has given them without certain criteria needing to be met beforehand. I'm guessing your colleagues aren't aware of this prior agreement you had with your employer?

The way they explained it to me, was that the bonus structure would be part of a "modernisation" of the company, which is why I expected that our new hire would have it included in his package.

When I negotiated it they never used the word "discretionary" and again it all seemed normal up to that point.

We agreed they'd eventually give me the targets as my line manager was gradually handing over part of her role to me, so it made sense the targets would be established once that happened.

My original plan was to discuss it during probation BUT now with this latest piece of information I think they'll just tell me that the parent company didn't approve it.

The mistake you made was accepting an employment contract which referred to a discretionary bonus and gave no criteria to guide how and when the bonus was to be awarded. If you signed the contract, that’s you agreeing to those terms, regardless of what might have been discussed informally or what you were told was the future plan.

Begin the conversation now. Identify some KPIs, or some stretch targets which aren’t in your BAU workload, and pitch the proposal that these should inform your bonus award. You need to be proactive - indeed, that’s what you need to be when hoping to receive any kind of bonus, you can’t just assume any bonus will simply be paid. Yes, they may say that your bonus wasn’t approved, or there are reasons why it won’t be awarded this year - but they’re far more likely to do that if you’ve simply never raised the issue or been proactive in suggesting objectives and goals for qualifying for it.

And for future reference when negotiating remuneration in other jobs, make sure that all of the above is clearly set out in your contract before you agree to sign it. My contract contains an entire page referring to my salary and performance bonus, how it’s allocated, what criteria guide its award, the circumstances under which I’m entitled to challenge the amount of an award etc.

Whilst I accept that that may seem overkill to some industries (I work in area of FS where bonuses are an expectation and employers shit hot around how they’re awarded or not awarded) the bottom line is never accept a vague “promise” or “plan” given during the interview process, you need it in ink.

Ah that's frustrating - it sounds like they may have agreed to it to get you on board, likely with the knowledge that it might not materialise. I think an open, frank (but polite, particularly given you're on probation) conversation is in order. If nothing else, to manage expectations and keep you abreast of plans going forward. Not easy, and I can see why you could feel frustrated.

I actually think they were being genuine when they "offered" it to me. As this was before the parent company took control of our smaller company.

It obviously is going to make me disgruntled as I counted on it to not make me feel underpaid.

For better or for worse I'm "stuck" with them for the next two years, one being that I got a title bump, and to keep it I need to be in this role for at least 2 years, and the other reason that it could make my CV "jumpy" unless I completely remove my shorter employment stint in another company.

Did you get a role/ responsibilities bump, or just a title bump? If your previous role was basically the same as current, you could start looking earlier and just cite not as expected.

I got a proper bump, went from senior individual contributor to head of department (with the responsibilities that it entails).

I'm not senior management, though (which the title would imply) but to me that's a non issue.

OK, well you could say, if this doesn't work out, that your current move was to do exactly that and allow you to develop the skills needed in the role, but that you are still looking for something that will use that alongside everything you have learned in roles before this one. I don't think 2 years is at all a hard and fast rule.

Most of the roles I've seen on LI ask for 3 years. I'd also definitely have to do some "redacting" on my CV.

If the bonus was negotiated because they recognised that the salary offered was out of line then if they say they can’t deliver on the bonus I would ask for a salary increase instead. If you like the job and want to stay I can’t see you have anything to lose by having this conversation.

Well they've mentioned my "bonus" again, and it will be based on the commissions my team is able to achieve. So the team would have "uncapped" ones Vs mine which is 15% of my salary.

My manager also mentioned offering them a "party" instead. I really tried hard not to roll my eyes with that one..