Loving and Hating the End-of-year Bonus

November 15, 2013 2 mins read
Loving and Hating the End-of-year Bonus

As far as companies are concerned, the point of the end-of-year bonus is to encourage workers to step up their game and improve performance.

Many companies give out this bonus at the end of the fiscal year; this method, at least on the surface, seems to be a way of maintaining talented workers, and to a certain extent does keep employees from switching jobs. Will the year-end-bonus act as an obstacle in your career path?

Recently, experts have shed new light on the groundless view that you must give up your end-of-year bonus when switching jobs. As the experts point out, in real debates involving the end-of-year bonus, parties must first look to the restrictive clauses in the contract they signed. If there are no restrictions, they must look to the employer’s rules and regulations. If neither are present, in most cases the law requires the company to respect basic legal principles. That is to say, wages must be paid in accordance with the labor provided—the same remuneration must be paid for the same work. Although this is simple in theory, the reality of putting it into practice is more difficult.

The employee should gather as much evidence as possible. Evidence can include: work contracts, clauses in the company’s regulations governing end-of-year bonuses, company notifications and emails sent to workers regarding the time and method of giving end-of-year bonuses, minutes and recordings from meetings where the bonuses were discussed, the bonuses received by colleagues who entered the company at the same time, and human witnesses.

In actuality, the shackles of the end-of-year bonus will never convince an employee who has already decided to leave to remain on board. These employees—long gone in spirit—will jump ship en masse as soon as the end-of-year bonuses have been issued, obviously not a good prospect for a company’s development. Trying to keep talented workers is laudable, but it mustn’t be done via shackles. Instead, companies should provide reasonable wages, good benefits, wide space for career development and a pleasant work environment in an effort to retain workers. For job seekers, before signing a contract be sure to go over the section regarding wages with a fine-toothed comb. Always understand your rights, because no one wants to see it come to litigation.

Marlon Mai's picture
Marlon Mai
Managing Director, Greater China