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Aren't bonuses a little separated from the standard market forces surrounding salaries? You don't know what your bonus will be when you agree to work for a comp

Aren't bonuses a little separated from the standard market forces surrounding salaries? You don't know what your bonus will be when you agree to work for a company, and how the bonus is funded is truly in part left to discretion of your superiors, and also partly tied to company performance and not the going market wage. Obviously you might leave after a few years of really unfair bonuses. But truly, they seem a little disconnected from regular market forces.

edanm 9y ago
Of course they're not disconnected - they're simply priced in. Everyone knows that if you go work for e.g. Google, you're getting a certain base salary, plus a bonus package (plus options/RSUs, plus free food, plus a lot of things). People consciously subconsciously price these in as much as they can. Of course if bonuses are variable it's harder to price them, but the same can be said of stock grants in companies. And no one can afford to ignore those - they can in practice make up a huge part of your pay package.
- humanrebar 9y ago
  > ...they're simply priced in... Well, you're correct. If the bonus is unacceptable, the employee can just quit. But a year of work (or more if it's event based instead of annual) is a big opportunity cost to find out that info. In other words, employees never take an unexpectedly huge bonus to the chagrin of the employer. So there is a power imbalance there.
  - lotsofpulp 9y ago
    The employee is (consciously or unconsciously) pricing in the bonus when they are hired. Whether or not they correctly calculate the bonus risk is not the onus of the employer. Meaning if you can’t afford or will be happy without the bonus, then you probably shouldn’t be accepting the job assuming the bonus will come through.
    - humanrebar 9y ago
      > Whether or not they correctly calculate the bonus risk is not the onus of the employer. It at least partially is. The employer needs to meet reasonable expectations and any commitments they made.

edanm 9y ago

Of course they're not disconnected - they're simply priced in. Everyone knows that if you go work for e.g. Google, you're getting a certain base salary, plus a bonus package (plus options/RSUs, plus free food, plus a lot of things). People consciously subconsciously price these in as much as they can. Of course if bonuses are variable it's harder to price them, but the same can be said of stock grants in companies. And no one can afford to ignore those - they can in practice make up a huge part of your pay package.

humanrebar 9y ago
> ...they're simply priced in... Well, you're correct. If the bonus is unacceptable, the employee can just quit. But a year of work (or more if it's event based instead of annual) is a big opportunity cost to find out that info. In other words, employees never take an unexpectedly huge bonus to the chagrin of the employer. So there is a power imbalance there.
- lotsofpulp 9y ago
  The employee is (consciously or unconsciously) pricing in the bonus when they are hired. Whether or not they correctly calculate the bonus risk is not the onus of the employer. Meaning if you can’t afford or will be happy without the bonus, then you probably shouldn’t be accepting the job assuming the bonus will come through.
  - humanrebar 9y ago
    > Whether or not they correctly calculate the bonus risk is not the onus of the employer. It at least partially is. The employer needs to meet reasonable expectations and any commitments they made.