We're Celebrating 10 Days of SHRM! Today's Gift: $15 to Starbucks w/ a SHRM professional membership. Promo code 10DAYSBUCKS.
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Develop your HR competencies and knowledge in-person in 12 U.S. cities or virtually.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Survey data prompt the question: Are employers benefiting from bonus programs?
North American employers do not expect to fully fund their annual employee bonuses in 2013, marking the third consecutive year and seventh time since 2005 that their bonus pools for annual incentives will be below target, according to a survey from consultancy Towers Watson.
Additionally, one in four organizations will pay bonuses to workers who fail to meet performance expectations, raising the question of whether employers are receiving a good return on their investment in these plans.
Towers Watson's Talent Management and Rewards Pulse Survey, conducted in June and July 2013 among U.S. and Canadian organizations, found that North American companies’ average projected bonus funding for current-year performance is 87 percent of target. That is the same as 2012’s target level and below 2011’s 95 percent target level. Since 2005, North American employers have been able to fully fund their bonus pool only twice: in 2006 (102 percent) and 2010 (111 percent).
“Employers continue to take a conservative approach to funding their bonus pools while the strength of the economy remains both uneven and uncertain,” said Laura Sejen, global rewards leader at Towers Watson. “While the vast majority of employers have some type of annual incentive plan, the way some incentive plans are designed and viewed by employees raises the question of whether employers are getting a good return on their investment in these programs.”
Indeed, the survey found that:
Most companies offer incentive programs as a way to recognize and reward employees for achieving results at different levels of the business, including their individual performance. Funding for incentive pools is generally based on how well the company performs financially.
Other recent research suggests that employees don’t perceive annual incentive plans as effective. Fewer than half of the employees who participated in Towers Watson’s 2012 Global Workforce Study agreed that there is a clear link between their job performance and their pay or that high-performing employees in their organization are rewarded for their performance.
“Some employers are not distinguishing enough in payments made to top and average performers,” Sejen said. “Companies may need to take a hard look at the design and delivery of their incentive programs to ensure they are meeting their objectives within the total rewards portfolio.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 3,200 companies