This time of the year, many employees are looking forward to receiving a little extra in their bank accounts in the form of an annual bonus. Surprisingly, most employees will not receive any bonus this year.
It is a popular misconception that if you are employed, you are entitled to receive an annual bonus to pay for your holiday or festive gifts and celebrations. There is no law that forces an employer to pay out bonuses to his employees. Bonuses can be paid for different reasons and must be communicated in the employment contract or company policies. If there is no agreement in place to pay a bonus, you should not expect anything more than your normal salary in December.
Some employers will agree to reward employees with something extra based on their performance or hours worked. This is the best way to ensure that annual bonuses are not just awarded for pitching up at work but that your most dedicated team members receive some form or recognition for the hard work they put in during the year.
In some companies, employees will receive an annual bonus if the business produced good financial results. The danger in allowing this type of bonus is that as long as the business performs well, you may create an expectation of earning bonuses and even in the event of poor performance, employees will still feel entitled to a bonus because they became used to the idea. The key to allowing this type of bonus is clear communication and letting employees know well in advance whether or not they can expect a bonus at the end of the year
There are still a few employers who will guarantee a 13th cheque as part of your package. These employers have no choice and must pay their employees annual bonuses, even if the company is not always in the position to do so. A contractual bonus is sometimes paid on date of anniversary, on an employee’s birthday or any other agreed date each year.
Unless you know that your employment contract clearly guarantees that you will receive your bonus each year, don’t bargain on the fact that your employer will feel generous this year. Rather put some money away to pay for additional expenses during the holiday season.