Target will double bonuses for salaried employees this year, the retailer announced last week.
Most salaried workers at Target receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. This year, the retailer will pay 100 percent of employees’ eligible annual bonus amounts for the most recent fiscal year—an increase from 50 percent in the prior year. Bonuses will be paid out in late March.
“Based on Target’s performance in 2023, including the $2 billion in additional profit growth our team delivered that exceeded the goals we set at the beginning of the year, we’re rewarding our team accordingly,” the company said in a statement.
The news comes as recent reports found that year-end bonuses were down in 2023 compared with 2022. However, bonuses continue to be a top strategy for many employers, especially those looking to stay competitive and keep workers happy amid continuing high costs of living.
SHRM Online rounded up additional news on the state of bonuses.
Walmart Made Compensation Moves Earlier This Year
The Target news comes after its primary competitor, Walmart, made compensation moves earlier in the year—including changes to bonuses for its store managers.
In January, Walmart—the nation’s largest private employer—said it is raising the average salary for store managers by roughly 9.4 percent—to $128,000 a year, up from $117,000. Store managers will also be eligible for bonuses of up to 200 percent of their base salary, based on individual store sales and profit.
Other Employers Have Announced Bonuses in Recent Months
Other employers have announced bonuses this year, as well.
In February, Wells Fargo said it giving out a one-time bonus of $1,000 to U.S. employees who were paid less than $75,000 in salary last year, while Bank of America said it would give restricted stock bonuses worth a collective $800 million to roughly 97 percent of its staff, according to reports.
Mark Cuban told Dallas Mavericks employees via email in January that they would be receiving significant bonuses—worth a cumulative $35 million.
(SHRM Online and SHRM Online)
Year-End Bonuses Were Down in 2023
In 2023, year-end bonuses were down between 3.8 percent and 36.2 percent from 2022 depending on industry, and down between 12.3 percent and 36.7 percent compared with 2021, according to data from payroll company Gusto, which analyzed data from more than 300,000 clients.
In December, bonuses paid by firms on Gusto’s platform averaged $2,145, a 21 percent decline from the $2,730 average in December 2022. The 2023 amount is also a 40 percent drop from the $3,583 average bonus handed out in December 2019.
The decline is largely the result of a less competitive labor market, meaning employers are not as motivated to give big bonuses or pay increases to woo and retain workers. Meanwhile, employers are also feeling the effects of the persistently high cost of living and are growing more cautious about spending.
“Bonuses have gotten smaller over the last two years,” said Liz Wilke, principal economist at Gusto. “That’s been largely driven by the labor market stabilizing and employers feeling squeezed by inflation. Declining bonuses indicate to us that employers are rethinking their aggressive talent acquisition and retention strategies as they look ahead to the next year.”
The State of Bonuses
Bonuses are still fairly common among many organizations, especially because they are highly desired by employees. But overall, the strength of the economy often plays into corporate decisions about bonuses, including those awarded during the holiday season, said Eric Cormier, manager of HR services with Insperity, an HR services firm headquartered in Kingwood, Texas.
In an interview with SHRM Online in November, Cormier said that although bonuses continue to be awarded by many organizations and can boost employee morale, some employers refrained from bonuses altogether the past couple of years due to fears of a recession.
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