Ask the Doctor Wed 4 Feb – The Workplace – Why did I not get a December Bonus?

David Mashiri asks why, after a year of hard work, he did not get a 13th salary payment as a Bonus?

Dear David, firstly let me say that no Bonus is automatically guaranteed, unless it is specified in your letter of appointment. Quite frankly, and I know that this is something you will not want to hear, I recommend to Employers that they would be foolish ever, to guarantee an employee a 13th payment as a Bonus. No bonus should ever be automatic or guaranteed. At best, a Bonus should be subject to performance and for that to occur it would be necessary for a company to have a Performance Management System in-place that strongly indicates that any warning for either Performance or Behavioral infringements which are on-file at the time of the Bonus payment, i.e. still active as a Warning, should either completely neutralize and cancel out the Bonus or partially do so.

David, the reality is that the payment of a Bonus however should always be subject to the financial status of a company over the year, and especially at the time the Bonus is due. No Employer can be expected to pay his staff a Bonus when the company is down in-terms of Turnover and Cash Flow or being throttled by ever-increasing overheads such as Rent, Operational Expenses and the cost of goods. Employees seldom can see the Big Picture and because a company is busy or seems to be selling large amounts of product, the assumption is that the Employer is pocketing that income. That is very seldom the case. In-fact in most Small Business operations in South Africa, if you were to look closely you would discover that whereas you are receiving your monthly cheque, your Employer is not taking anything out of the company and has risked everything he owns and more just to keep the doors to your company open. To expect him to pay a bonus when turnover might be down by 25% because of the economic recession is ludicrous.

David, with a true unemployment rate in South Africa above 60%, what you might want to do is thank your Employer every day, for the job you have, instead of expecting more and more rewards via increases and bonuses, without you wanting to open your eyes and understanding the true nature of the hole the business is actually in.

Having said that, one of the greatest weaknesses amongst SA Small Business people is the inability to communicate so it may be that the fault lies not at the members of staff for expecting those increases and bonuses but at the Employers feet for not regularly communicating the true state of financial affairs in the company to staff at all times so that they properly understand the situation.

“Wait”, I hear you say, “What if I am in an Industry governed by a Bargaining Council which prescribes the Bonus as a condition of employment?”. Well David, irrespective of what the Bargaining Council prescribes, you cannot get blood from a stone. No Bargaining Council will prescribe this condition of employment without also making allowance for its members to apply for condonation to avoid paying a benefit when it can be shown that the money is simply not there and the financial state of the company is dire.

Another consideration is whether Bonuses should only be paid in December? The short answer is no. Bonuses do not have to be paid at all but if a company decides to reward staff members by paying a bonus, they do not have to be paid as a collective i.e. all staff at the same time. Payments of bonuses may be graduated throughout the year and the most popular mechanism to avoid paying bonuses in December and possibly getting a more long-lasting and sustainable increase in productivity and motivation from staff, is by paying them in the Birthday Month of the Employee.

David the final consideration is what Bonuses are actually paid for. I have alluded to it but let me stress, a Bonus is ultimately paid for both Good Performance and as importantly Good Behavior. This means that you may be doing a good job at the company but that your attitude stinks. Attitude often means more to an Employer than only Performance so bear this in-mind when you are expecting a Bonus.