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> To add further, though salary cuts can be done by companies (this may vary across geographies), it's usually a little more cumbersome and also sends a differe

> To add further, though salary cuts can be done by companies (this may vary across geographies), it's usually a little more cumbersome and also sends a different message to employees. It's a lot more cumbersome, and will create a lot more friction and problems. The key reason there's even a distinction between salary and bonus is that a salary is guaranteed as long as you work there, while the bonus is not.

rootusrootus 8y ago
OTOH, when the bonus has been paid out reliably for years, then the distinction gets pretty blurry. My company just cut bonuses this year for the first time in memory, by almost 40%. In the last two weeks we have had a half dozen new resignations per day. The company is profitable, they just set a target for year-over-year revenue gain that has not ever been met in the company's history, so that they'd have an excuse to pay less. And now everyone's pissed and the best folks are walking. I am pretty sure it was deliberate, a way of cutting way back without having to give severance or make the news.
- fma 8y ago
  I'm in the same boat. We have measurements and the bar gets moved every year. Now we are at 150% profitability compared 2 years...and the bonus were nice. Now to get our regular size bonus we need to keep it up. In other words, the company makes more money than before, and pays less bonus.
  - maxxxxx 8y ago
    Your CEO has a nice boat on order. The money has to come from somewhere :-)
- dunpeal 8y ago
  > The company is profitable, they just set a target for year-over-year revenue gain that has not ever been met in the company's history, so that they'd have an excuse to pay less. And now everyone's pissed and the best folks are walking. Doesn't sound like that "excuse" is working for them. > I am pretty sure it was deliberate, a way of cutting way back without having to give severance or make the news. It's the absolute worst way of doing layoffs. As you observed, the people walking out are the best performers who have great options elsewhere. Guess who stays? Adverse selection in action.
henrikschroder 8y ago
Another aspect is that, depending on your jurisdiction, salary is used as the base for calculating unemployment pay, parental leave, pensions, severance, and similar. As an employee, if you're given the choice between salary increase and bonus, the salary increase is worth way more in the long run.
- dunpeal 8y ago
  Yeah, absolutely.

rootusrootus 8y ago

OTOH, when the bonus has been paid out reliably for years, then the distinction gets pretty blurry. My company just cut bonuses this year for the first time in memory, by almost 40%. In the last two weeks we have had a half dozen new resignations per day. The company is profitable, they just set a target for year-over-year revenue gain that has not ever been met in the company's history, so that they'd have an excuse to pay less. And now everyone's pissed and the best folks are walking. I am pretty sure it was deliberate, a way of cutting way back without having to give severance or make the news.

fma 8y ago
I'm in the same boat. We have measurements and the bar gets moved every year. Now we are at 150% profitability compared 2 years...and the bonus were nice. Now to get our regular size bonus we need to keep it up. In other words, the company makes more money than before, and pays less bonus.
- maxxxxx 8y ago
  Your CEO has a nice boat on order. The money has to come from somewhere :-)
dunpeal 8y ago
> The company is profitable, they just set a target for year-over-year revenue gain that has not ever been met in the company's history, so that they'd have an excuse to pay less. And now everyone's pissed and the best folks are walking. Doesn't sound like that "excuse" is working for them. > I am pretty sure it was deliberate, a way of cutting way back without having to give severance or make the news. It's the absolute worst way of doing layoffs. As you observed, the people walking out are the best performers who have great options elsewhere. Guess who stays? Adverse selection in action.

henrikschroder 8y ago

Another aspect is that, depending on your jurisdiction, salary is used as the base for calculating unemployment pay, parental leave, pensions, severance, and similar. As an employee, if you're given the choice between salary increase and bonus, the salary increase is worth way more in the long run.

dunpeal 8y ago
Yeah, absolutely.