RE: Bonus instead of raise -- why?

["Brierley, Sean" <Sean -at- Quodata -dot- Com>]

Your company is clearly doing this to save money. That is, let's say you
make $50,000 per year. This year you'll get $50,000 plus a $2,500 bonus.
However, next year, your pay will still be only $50,000. If your company
does the same thing, you'll get the same $52,500. Whereas, if you got a 5%
raise, your base pay would be $52,500 next year and a 5% raise would leave
you with $55,125 for pay . . .. Also, if you try to get a job elsewhere,
when bargaining with the potential employer's HR service, your current base
pay is still only $50k versus $55k, making it likely that your potential
employer would offer you less.

That is, a pay raise is permanent and therefore better than an equivalent
bonus. However, any money is better than no money, right? (As an aside, I'd
be more likely to leave if a company stopped increasing my pay and started
giving me equivalent bonuses than I would if I got a salary increase,
largely because I'd sense a lack of committment to me on the part of my
employer.)

Cheers,

Sean
sean -at- quodata -dot- com

> -----Original Message-----
> From:	anonfwd -at- raycomm -dot- com [SMTP:anonfwd -at- raycomm -dot- com]
> 
> I'm a tech-pubs manager at a smallish-sized software company. My company's
> annual review cycle is coming around. I have just been informed that --
> all across the company -- raises will be handled differently this year.
> Instead of getting, say, a 5% raise, we will get the 5% in one lump sum
> with the first pay period at which the raise would have been effective.
> 
> Anyone know why they might be doing this?  Is it to hold the line on
> future increases?  Are they betting that in this job market, people won't
> just pocket the lump sum and leave?
> 

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