Study of performance bonus plans - Bonuses for white-collar workers become more common
Claeys & Engels has conducted a large scale study of CBA no. 90 (the so-called non-recurring performance-related advantages), in close cooperation with Vlerick and Hudson. This study received a lot of attention in the press this week. Please find the first results below.
More and more white-collar workers are entitled to a bonus. This change is mostly due to CBA no. 90. In 2009 only 5% of executive white-collar workers were entitled to a performance bonus. In 2011 this had risen to 20% and in 2014 even to 40%.
Companies refer to the supporting of strategic objectives (31%) and tax optimisation (29%) as the main reasons for introducing a performance bonus plan.
The study, however, also shows that companies do not use performance bonus plans enough as an instrument of strategic rewards. For the executive white-collar workers, solely financial criteria, such as profitability and/or turnover, are used in 47% of the plans. Strategic criteria, such as innovation, client satisfaction and durability, are rarely used. Moreover, no less than 86% of the companies only use criteria on the level of the local branch and/or the company as a whole for their executive white-collar workers. And this whilst scientific research has shown that it is important to bring the objectives sufficiently close to the employees, and to pass to the team-level.
The greatest criticism on CBA no. 90 is lack of possibilities for individual differentiation, but a number of companies have found creative solutions for this, as appears from this link .
Action point
- Visit this link to view the complete results.
- Think about tangible objectives at team-level to help realise the strategic objectives of the company.