Why the Base Salary + Bonus Model is Bad

Whenever I take a new job I always make sure that my bonus is a small portion of my compensation and not something I spend the year looking forward to.  In fact, from a business perspective, paying out a bonus is very bad idea from a business perspective.

First of all, the employer is still paying the same amount of money to the employee, the only difference is that they hold on to that money for a year, collecting interest on that money.  Unless you have been living in a developed country, you.

Every day an employee deals with certain stresses that can be managed but not always avoided.  A bad commute with packed and noisy trains, a breakup with a girlfriend, a fight with some friends, loud workplace, a loss in the stock or cryptomarkets, poor management.  All of these things lead to a level of stress building up inside someone.  Going to the gym, praying/meditating, a vacation and that semi-monthly paycheck are what help relieve this stress and contribute to the health and well-being of the employee.

So what happens? Well, the employer is allowing their employees to get more stressed out because they are holding back on the biggest contributor to the employees well-being.  By holding back pay by calling it a “bonus”, the employer is contributing to burned out workers, and the chances of an employee wanting to quit goes up, but they will only quit after receiving their bonus.  And what do you think happens to their quality of work while they are lame-ducks waiting out the end of their term? Their quality of work suffers… so if you are in the position to not have bonuses, think about it. And if you are an employee, tell your employer that:

  • My landlord didn’t accept my offer to pay rent once per year
  • If my landlord doesn’t fix problems in my apartment, I don’t threaten to hold back my rent in 12 months, I stop paying rent now and take them to court
  • The employer is still paying the same amount of money
  • You are getting 100k worth from me during the year, not 150k (if base = 100 and bonus = 150)
  • I feel like a 100k employee for 51 weeks of the year, but I am still costing you 150 (plus benefits and other administrative costs…etc)
  • Burned out programmers lead to the collection of massive technical debts

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