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Thanks for the Bonus, I Quit

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Re: Thanks for the Bonus, I Quit

#11

Post by smitty1e »

Negitivefrags wrote: post #6

I actually think bonuses and equity grants are terrible for comapany morale. I've seen it many times, and heard many more stories. On top of the issue in this story, there are others too. For example, if someone wants to leave, but the bonus or vesting is coming up, they will stay, and you don't want people on a project who don't want to be there. As another example I know people who work at companies that are going…

Incentives happen because they are empirically effective. I would contend that the issue is less the content of the incentives but rather the perception of fairness.

If everyone is aware how the bonuses work and feels their 'fair' share is obtained, then it just becomes another part of the calculus.

I speculate as a non-manager that bonuses are a good way (in the federal contracting realm, from the company perspective) to incentivize employees without inflating their base salary to the point that the company isn't competitive for new work.

Re: Thanks for the Bonus, I Quit

#12

Post by smitty1e »

sokoloff wrote: post #10
Negitivefrags wrote: post #6

I actually think bonuses and equity grants are terrible for comapany morale. I've seen it many times, and heard many more stories. On top of the issue in this story, there are others too. For example, if someone wants to leave, but the bonus or vesting is coming up, they will stay, and you don't want people on a project who don't want to be there. As another example I know people who work at companies that are going…

If you pay a high salary, you create an incentive to just mark time and maximize the number of paychecks collected as well. If you pay in part in equity (or performance-based bonuses), you can balance that somewhat. No pay structure is a substitute for strong leadership, but each system provides pulls in certain directions.

> No pay structure is a substitute for strong leadership

Can't emphasize this point enough. Frog$kins are necessary, but not sufficient, for retention. Especially when the talent has enough resources to decide that it isn't tolerating a manager or customer with the personality of a dented wastebasket.

Re: Thanks for the Bonus, I Quit

#13

Post by alistairSH »

Negitivefrags wrote: post #6

I actually think bonuses and equity grants are terrible for comapany morale. I've seen it many times, and heard many more stories. On top of the issue in this story, there are others too. For example, if someone wants to leave, but the bonus or vesting is coming up, they will stay, and you don't want people on a project who don't want to be there. As another example I know people who work at companies that are going…

Mostly agree.

Bonuses should be a surprise to employees. Anything else just becomes an expected part of comp bundle.

Re: Thanks for the Bonus, I Quit

#14

Post by jakemal »

dewitt wrote: post #7

> "$25,000 was not enough money to retire on for sure, even in 1996." $25,000 in 1996 is $42,000 in 2021. Seems like a modest incentive for top tech talent, even back then. * To respond to the comment below, the author had been working as a hardware systems engineer at headquarters for 10 years by 1996.

I wonder how it compares to the average salary for an experienced hardware engineer. It may be a ~50% pay bump in 1996 vs a 10-25% bump today.

Re: Thanks for the Bonus, I Quit

#15

Post by wccrawford »

A bonus like this, I would never expect to actually get any portion worthwhile. Even if I performed well, there's going to be someone who doesn't. And it might even be me that doesn't perform. Who knows?

Instead, I would just work at my usual pace, which is already quite fast, and I'd probably already have been being smart about the cost of components anyhow.

In general, this leads to good outcomes anyhow, and I didn't have to stress out about it.

Re: Thanks for the Bonus, I Quit

#16

Post by Scene_Cast2 »

I've been thinking about hiring a couple of interns to work on projects that I don't have enough spare time for. One thing that came across my mind is whether I should have some sort of an incentive for coming in under budget or ahead of schedule. On one hand, with hardware projects, sky is the limit for the potential costs (and they wouldn't have a reason to not overspend). On the other, having such an incentive would bias the planning and could result in issues seen in the article.

Re: Thanks for the Bonus, I Quit

#17

Post by jedberg »

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one.

And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People screamed and yelled and were pissed. At the company all hands they spent a lot of time explaining that bonuses weren't guaranteed. Some of the lower paid folks were actually crying about not making critical payments because they counted on the bonus. Morale went way down. People left because of it.

Stories like this are one of the stated reasons Netflix doesn't do things like bonuses or any sort of variable comp. Because once you get one once, you feel entitled to it in the future, and it feels like a loss when you don't get it.

Re: Thanks for the Bonus, I Quit

#18

Post by diogenescynic »

Negitivefrags wrote: post #6

I actually think bonuses and equity grants are terrible for comapany morale. I've seen it many times, and heard many more stories. On top of the issue in this story, there are others too. For example, if someone wants to leave, but the bonus or vesting is coming up, they will stay, and you don't want people on a project who don't want to be there. As another example I know people who work at companies that are going…

Couldn't disagree more. Want to see employees work hard and be motivated? Give them equity that is a meaningful amount. I know it works for me... I work 10x harder for my current job where I have equity and stock bonuses than at previous jobs that were all salary.

Re: Thanks for the Bonus, I Quit

#19

Post by splittingTimes »

themodelplumber wrote: post #4

Nice post. 366 MHz office hardware in 1996...yeah that would have been pretty awesome. The story also made me wonder about bonuses in European countries where private employee salary numbers are publicly available (or so I've heard). Is the same true for bonuses, if they are offered?

In Germany you have laws to ensure equal treatment in the workplace. So you are allowed to go to your HR and ask what up to i think 6 other people in a similar position & experience level as you are in earn. HR will of course not disclose the names.

Re: Thanks for the Bonus, I Quit

#20

Post by MarblePillar »

dewitt wrote: post #7

> "$25,000 was not enough money to retire on for sure, even in 1996." $25,000 in 1996 is $42,000 in 2021. Seems like a modest incentive for top tech talent, even back then. * To respond to the comment below, the author had been working as a hardware systems engineer at headquarters for 10 years by 1996.

The incentive is in the mind of the beholder. $42,000 captured the mind of the author; for its promise, he worked extremely hard and long, mustering a productivity far and above what he normally would have achieved. Then, when he in fact received not $42,000 but $3,666, less than one-tenth what he expected, he convinced himself that this was not a loss but a win because $3,666 is $3,666 more than $0.

What is your lesson here? My lesson is to become the house, because the house always wins.

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