Bonuses: high stakes or motivational money?
When it comes to pay packets, Kiwis prefer to play it safe, as new SEEK data reveals. But is this the right strategy?
Turns out we would much rather choose certainty, preferring to see dollars in the pay slip, over more lucrative but not guaranteed bonuses. But should we believe in ourselves a bit more, back ourselves to meet and exceed the KPIs and nab the bonus? Are we just taking the easy and safe way out?
Recent data released by SEEK reveals that 81% of New Zealanders would opt for a guaranteed 5% pay rise over the option of a 10% performance bonus. That means most of us choose to settle for half of the amount of money, just to secure it. But increase the odds, and we can’t resist; 49% of us would take the bonus if it was 20% compared to a 5% pay rise.
So there is a tipping point, but for most the choice doesn’t actually exist. Just one in five Kiwis have a bonus as part of their remuneration package. At the point of package negotiation it appears Kiwi candidates are more focused on securing the best possible salary package rather than ensuring performance bonus inclusion.
In fact, James Dalrymple, Director at specialist recruiter Robert Walters, believes that our expectations of bonuses aren’t increasing as we focus on securing the maximum fixed-term remuneration package and benefits and tend to ignore the bonus component.
But there is a continued trend of low wage growth in New Zealand and it’s possible we may be backing the wrong horse. The beauty of a bonus is that it clearly outlines performance criteria and what is needed to get the golden ticket. The measures become motivational, as your mindset turns to meeting and exceeding the KPIs to bag the bonus. It is certainly a positive for employers too, as employee performance is directly aligned to outputs, ensuring only those who are performing receive bonus payments.
While performance bonuses may not be traditionally aligned to a role or industry like yours, there is certainly no harm in asking the question. And when it comes to contract negotiations, consider what works best in terms of motivation – because at the end of the day, it’s results that matter.