Here’s an interesting one. One of my friends turned in his two weeks notice early in the year right around bonus time figuring he had put in his time last year, earned a particular level of bonus, and had timed the departure and announcement right. Boy, was he in for a surprise. When the topic of last year’s bonus came up, he was shocked to find out the company was not going to give him a dime. He quit, so no bonus, plain and simple.
For a bit more perspective, I knew of his work, and he’d been with the company for several years, was viewed as a high performer and had some good accomplishments the prior year. The timing of his announcement was critical as well. The bonuses are announced and disbursed around a period of a few weeks at the beginning of the year. The exact date of the “discussion” pretty much depends on when the manager sets up the meeting based on calendars, vacation, etc. In his case, his meeting was later in the period and bonuses were to be paid later that month. What’s messed up is, if he didn’t give his two weeks notice and just quit on the last day, he would have already had the bonus disbursed to his bank account. Because he did the right thing (he thought) and gave a full 2 weeks notice, the company used it against him and halted the delivery of last year’s bonus. In thinking through the scenario a bit more, I can see each party’s perspective to some degree, and it’s complex.
Why He Deserves the Bonus Regardless
- He met his objectives and would have earned a bonus had it not been for his departure.
- It was into the next year. He’d already earned it. The bonus isn’t meant to be for current performance or future potential, but rather what happened in that discreet time period, which elapsed.
- It’s a small world. He wanted to leave on a good note and did things in the conventional manner in offering 2 weeks notice. Now, he left with a sour taste in his mouth and will likely badmouth the company and people involved in the future.
- Next time, will other employees that timed it that way just quit without giving any notice to avoid a similar fate?
Why the Company Shouldn’t Pay a Bonus when Quitting
- There’s no contractual or legal obligation to do so. The bonus is discretionary and why give money to someone who’s leaving?
- How would this sit with other employees considering a move? Would they also try to capture the prior year’s bonus and leave right around that time knowing they’d be paid anyway?
- Should the company be rewarding deserters? That’s how it is viewed sometimes, especially when going to a competitor. Not only are you taking the know-how and training the company provided you, but then you expect a financial sendoff on the way out?
- This money would be better disbursed to remaining loyal employees (which I doubt happened though, probably just that much less in payroll that year)
- If this were your employee and you owned a small business, would you pay them? We often view “the company” as an invisible system of entitlement, but we don’t think of how we’d act. I don’t know that I’d pay it out personally.
So, much depends on perspective. Given the amount of detail from the transaction and some of the considerations, what are your thoughts?
Does He Deserve the Bonus?
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