Employer Is Giving Discretionary Bonuses

My employer has told everyone in the office they will be “rewarded” with a bonus this year due to “putting in the extra yards” during covid. It was emphasised that this is a discretionary amount & isn’t to be discussed amongst other employees. This tells me favoured employees will benefit & others not treated equally. My question is… is this legal?

Comments

  • +29 votes

    discretionary amount & isn’t to be discussed amongst other employees.

    In my experience, I thought it has always been a discretionary amount like your salary - you don't go tell others what you earn? :/

    • Why not? Everyone in my workplace is on the same award and you can work out their level of pay very easily.

      • Yes people can and should discuss their pay with each other. But it's still a personal choice to reveal it.

        • omg I wish this was more common. I'm in a high income industry and it's shocking to discover after some probing the drastic changes person to person. I've managed to draw it out of most people I work with aside from my deliberate research, everyone else seems to be in their own bubbles based on what the employer has sold them. Eg a person I know has 15 yrs experience and given their hours isn't a whole lot above minimum wage (and genuinely thinks he's doing well because after like 8 yrs of no pay rise his boss 'generously' fought to get him a 5% rise without being asked). Others with 5 years experience pushing 200k. All because somehow employers have convinced the world that talking about salary is taboo.

          • @900dollaridoos: One thing I like about government, one of the few things, is that salaries for most employees have standard formulas for pay. If you're working in an office full of APS03 workers then you know everyone is getting paid the same. If someone is working more on an APS04 level, then they have a clear path for promotion to it because their going to stand out from the average APS03 and could handle any APS04 training easily. Maybe it's not healthy to do it like that but a lot of people naturally advance to their skill levels, or to a rank just above their level of competency unfortunately.

            • @AustriaBargain: tbh that sounds ideal for me, i also love the idea of flex time. Every industry has it's pros and cons though. I get almost triple what I would if I'd done the same career in gov, but also work way more in shitter conditions and remote. I think as I get older the gov pros and cons will definitely become the winner for me.

          • @900dollaridoos: Which industry is this?!

      • Not every workplace is like that. Most “professional” places discourage discussing salaries and bonuses.

        • +64 votes

          This is just HR tactics to ensure people don't get upset about being paid less than others in similar positions/roles.

          • @ntz88: If OP feels HR is being unfair, he should raise this issue at the next staff meeting and make the company cancel this initiative as it is unfair.

            Everyone in the company will love you for bringing justice.

            Its like during the GFC govt. Handed out $800 to every aussie and this 1 university academic went and did some research and tried to block it for being unconstitutional.

            • +12 votes

              @Chchnu: Bonuses are always based on performance and it's very unlikely that it's distributed evenly/equally.
              OP is acting a little entitled on this one.

              Depending on the organisation, managers are given a pot and the percentages that they can play around with. for example, they might distribute 12k, 11k, 10k 8.5k, 8.5k amongst their 5 reports based on performance for that year. their decisions are usually reviewed by HR so i don't think it's a favourites game but more about how well you did that year.

              again, the reason why they don't want you to talk about it, is because people will compare themselves with others in similar roles and how much they received. This is a headache for managers and HR.

            • @Chchnu:

              Handed out $800 to every aussie

              Not true - every Aussie did not receive $800!

            • @Chchnu: I didn't get $800. Nobody I worked with did either.

        • In my contract it stipulates you can get dismissed for discussing salaries with other employees. Which is absurd… I don't think it'll ever hold up, and employees discuss pay anyway.

          However, companies don't want you discussing pay because it's a disadvantage to them. If you don't know you're getting paid less than everyone else, then you're probably not going to care.

          This tells me favoured employees will benefit & others not treated equally. My question is… is this legal?

          However, this is also absurd. Questioning the legality of giving varying bonuses to different employees? Honestly, this just comes across as entitled. Be lucky you're even getting a bonus during a pandemic.

      • This sounds fair & the way I believe it should be… on a grading system like government jobs are graded.

        • +18 votes

          Life isn't fair. Get used to it.

          • @DisabledUser239475: Oh yeah? where do you draw the line? Genocide on the opposite side of the world, but get used to it?
            What a short sighted remark.

            We should always strive to improve unfair situations. Not get used to it.

            • +5 votes

              @Blitzfx: Wow what a step up. Should we start comparing covid lock down unfairness to slavery next?

              Have a discussion with your boss about an unfavorable bonus performance review, I bet you have never done it - because if you had you would know, its not fair or equitable all you will do is look like a spoilt crying brat.

              Unless your EA or contract promises you something (ie; $2 bonus per box packed if the criteria is met) which is objectively measured (ie; pack 2 boxes per hour on average per shift) with zero subjective measurement criteria. You will lose.

              • @DisabledUser239475: Have you considered trying to argue for zero subjective criteria instead of bending over and accepting what they're spitting in your face?

                •  

                  @Blitzfx: Who me and my army?

                  If you work in a unionized sector chances are your bonus is fixed to an objective measurement. If they don't pay sure you have a union to fight for you or an agreement to threaten them with.

                  In a corporate professional sector its a mixture of objective and subjective, but guess which one will take more weight at the end of the day. Who will fight for you - no one and you'll successfully piss off your employer which will no doubt make next years bonus "even better".

            • @Blitzfx: No need to conflate the situation to the most extreme circumstances. Everybody has their own line which represents their balance between practicality and their moral ideals.

              That being said, there is unfairness everywhere you look. If you choose, yes it is a choice, to get offended by the most minute injustices then you're the one that has to live in a constant aggrieved state. And you'll probably make a lot of people miserable around you.

              Worry about what you can control and try not to project moral authority over others.

              • @spiff: It annoyed me because I've had experience, and seen partial success from acquaintances who's supervisor had a backbone to remove vague and subjective criteria from their performance, instead of taking the stance of "deal with it" like this clown is telling OP.

                It's ridiculous and exactly why no one has a collective mentality to change it while working in private sector.

        • Is there a need for a spoon full of sugar to make the low bonus medicine go down?

        • A person could have worked there for 12 years and while a satisfactory worker may not do more than is required. Should he get a bigger bonus than someone who's been there three years and works harder/extra hours/makes bigger sales.

          Especially with Covid standing down a lot of workplaces there would have been many that just accepted the situation (ie staying at home getting jobkeepers) while others would have looked at ways they could still help. The bonus was to thank them all for the combined situation, but is it fair they get the same bonus?

          • +1 vote

            @dizzle: thats the great system of subjective discretionary bonuses.

            It doesn't matter. As people will realise, your relationship with your boss and bonus gatekeeper is FAR more important than performance (in a subjective bonus world)

      • So you think, unless you've taken an office poll how can you be sure?

    • +29 votes

      you don't go tell others what you earn? :/

      Yes, your employers would prefer that you do not discuss what you earn with others in your workplace.

      People finding out that they're doing more work, but earning substantially less, tends to make employees unhappy. Worst of all, is that those people then want more money!!!

    • It is an advantage for the employer if the employees y don't share their salaries, as it is harder to assess your position against others when you don't know who or what you're up against.

      This way the employer can play you and keep your salary as low as possible.

      I've worked for companies who share and who don't share the salaries of their employees and find that if everyone is open and honest there is less chit chat and talking behind each other's backs, but more being up front about results and achieved KPIs.

    • Exactly, what's new. Not talking about the discretionary bonus, but the "favoured employees will benefit"

  • Yes, perfectly legal. Clue in the name. Discretionary.

    • I think the important word is 'bonus'.

      • Not necessarily. Some bonuses are part of your contract pending certain met criteria and entitlement can be quantitatively/qualitatively demonstrated. Discretionary bonuses are just that, at the discretion of the manager/director.

    • I'm replying here, because yours is the first of many comments saying perfectly legal.

      I agree it probably is. But i think there is always a danger in doing something like this, that they could do something illegal with it. What if they deliberately only gave bonuses to men, or gave them a lot more, etc etc. Sometimes this stuff happens by accident or coincidence, i'm not saying it couldnt work out that way for legitimiate reasons. But i dont think just because it is Discretionary means its beyond all analysis and cant be challenged. BUt its more likely to be a symptom of other ongoing problems and issues rather than a one off issue.

      I think there are a lot of dreamers in this thread, who think that upper management have a good view on what the performance difference is between staff on the frontlines. I've seen plenty of workplaces where it is heavily disconnected. Personally, i think if you do want to fairly give out discretionary bonuses, they should be tied to some clear metric, or you should meet with everyone getting a bonus.

      My experience is the ones who complain the most tend to be the worst performers, and its the quiet non-questioning ones that usually are more likely to get shafted on something like this.

  • No different to your salary, is what they want to give.

  • The ‘favoured’ employees, probably are the hardest working ones. Good chance to see to where you are at

    • +68 votes

      The ‘favoured’ employees, probably are the hardest working ones

      Have you never worked in corporate Australia?

      • Both could be true, sometimes it’s hard work that decides other times it’s hard ‘brown nosing’.

        • Yes, I agree. And what one departments’ Manager might think one of his/her employees is worth could significantly differ from another departments’ Manager’s decision and his/her employees.

    • The favoured ones just smooch upto the bosses, usually nothing to do with work ability.

  • This tells me favoured employees will benefit & others not treated equally. My question is… is this legal?

    Something tells me that you may be on the lower end of the bonus ladder.

  • Bonuses can often be linked to performance ratings.

    It's better that way so the bottom feeders in the team don't get the same as those who work hard

    • How would this work in government where everyone does hardly anything? I guess that's why there's no bonuses in government roles…LoL

    • Agreed.
      This is especially true in systems where everyone who is on the same "pay level" is paid the exact same salary.

      By having bonuses to award, I am able to reward those who have delivered outcomes at a higher level than the others. (which helps me retain them)
      It isn't a lot of money when compared to annual salaries… but it tangibly demonstrates appreciation and recognition of what they do & how they do it.

  • +15 votes

    Employees are in their best interest to share what they're getting paid with each other (salary or bonus).

    • +5 votes

      Maybe financially, but might not be psychologically/emotionally. E.g feel like crap until next year/when leave; have everyone hate you and scrutinise your work.

      • Or, understand your market value and the importance of salary negotiation, and how fair and rewarding your company may or may not be.

        Not much use being happily underpaid because you took the first offer you got 10 years ago and haven't asked for a raise since.
        This is why you hear stories about new hires getting paid more than experienced workers.

        This can end up being even more emotionally damaging, like a massive betrayal

    • I'm interested in this point of view - could you please say more about why you believe that?

    • I think you are partially correct, there is absolutely no reason to discuss if you are making more than everyone else lol.

    • Good to talk to trusted peers about it.

      If you are earning more than your peers due to hard work, luck or any other reason, and other lower earning individuals find out, friendships and professional relationships can potentially be damaged if those employees perceive themselves as working equally hard for less pay. If they are equally deserving, it can be very beneficial for them to know their monetary worth too.

      Definitely two sides to the coin.

  • +34 votes

    The only one who wins when employees don’t talk about their salaries with each other is the employer.

    Be open. Talk about it. You’ll find out exactly what’s going on.

    • We have been told that discussing it with others is a breach of the company’s.confidentiality and will be viewed as a serious misconduct.

      • “We have been told that discussing it with others is a breach of the company’s confidentiality and will be viewed as a serious misconduct.” I wonder if that is legal. It’s hard to believe that discussing how much you got paid would be breach of company confidentiality. Sounds like management are concerned that there will be a few unhappy employees if it is discussed.

        • If it is on your employment contract, likely a NDA clause about this, then it is legal.

          Different question on whether it is ethical and lawful.

          • @NeutralName: Even if it's on your contract and you've agreed to it…. the courts/judge can overrule such things as being unfair and thus not legal.

            Basically, even if you discuss it (hence illegal) there's usually nothing the employer can legally do about it. Then again, you might find yourself at the end of the bonus list, and front of the chopping block. Or get relegated to doing the shit work/shifts.

      • We have been told that discussing it with others is a breach of the company’s.confidentiality

        Have you just "been told" this, or is in your contract? If it's in the contract, what is the actual wording?

        And do "others" include the Tax Office, your bank, credit providers, and all sorts of other organisations that ask for details of your pay?

      • Haha, love this. We had something similar, and then at one point the HR bragged about how they exchange employment data with their competitors, to make sure everyone in the industry pays reasonable (aka. not more than the others) salaries for each role.

        So if the employers are doing it for their benefit, it is not hard to see why the employees should too…

        Telco.

      • Now THAT is illegal. Unless it's in your contract, in which case it will eventually find its way to a union and a lawsuit.

    • I completely disagree with this.

      So let's say you discuss with your colleagues and you find out you are paid less, great now you get paid less and feel like crap. You may ask for a raise and probably won't get it, meanwhile you slowly start to resent your colleagues as you feel like you should be paid the same or more and all of this is because you had no idea of your worth in the first place.

      Or on the flip side you tell your colleague you are paid more than them and then have that person slowly start to resent you because of it.

      End of the day if you don't know your worth enough that you are underpaid, that's on you.

      I feel nothing good will come from discussions like this in most situations. Maybe occasionally with some level headed people it works out.

      • In ALL of the situations you described you have literally outlined the reasons someone should leave a workplace.

  • My question is… is this legal?

    Yes.

    This tells me favoured employees who put in greater effort and achieved greater results will benefit & others not treated equally who didn't, won't.

    FTFY

    • Gosh I wish that were the case, but having been drafted in to assist remuneration committee meetings a few times, your efforts and results have little to do with it. What you need is someone on that committee who is willing to actively advocate for you and believes you are a high performer. If no-one in attendance does that, you're almost certainly getting downgraded to an average bonus/pay increase regardless of actual performance. It's not just individuals, entire teams can be downgraded because their exec or operations manager cares little about what they do or they feel that a manager is 'too nice' and must have graded their staff too highly.

      • your efforts and results have little to do with it. What you need is someone … who believes you are a high performer

        So your efforts and results do have a lot to do with it, just more the perception than necessarily the actuality?

        Perceived Effort Actual Effort Reward
        High High Yes
        Low High No
        High Low Yes
        Low Low No
  • Sure is legal. I have seen it work and seen it back fire over the years depending on how much or little it is.

  • I'll discuss my salary happily anytime. I got a decent bonus this year which was not expected.. I'm going to be grateful and respectful, and keep it private as requested.

    Even if bonuses were being applied in line with effort / results throughout the year, disclosing them would create such drama that I think they wouldn't be issued in the first place.

  • Is the bonus on your contract?

    Even contract bonus amounts are discretionary and based on performance which is subjective. It depends on whether sucking up all year is worth the extra money.

    I remember when I worked at an investment bank and one of my colleagues told me they put in so many additional hours and the bonus was so disappointing they would have made more money stacking shelves at the supermarket. Granted it was a bad few years at the bank but it was hilarious conversation.

  • It's Legal, and if you don't like it, you can always donate your bonus to me!

  • 'You may be awarded free stuff depending on a number of factors'.

    Somehow this is illegal.

    The 'discretionary' part covers a lot of ground, because it would be impossible to codify:

    *exceptional performance
    *extra mile/effort
    *company financials and ability to pay the bonus

    And so many other reasons.

    How would you even prove that you should've gotten it? Just because someone else got it instead of you? Maybe they did a better job than you? Is that hard to swallow? That's why we don't openly share salary because while on one hand, it can reveal discrimination, the other hand it can a bitter pill to swallow when someone else is paid more than you, even if it can be justified by management.

  • I don't want to sound harsh, but maybe be thankful you are receiving any sort of bonus at a time when many people have lost jobs or had hours severely reduced.

    Look on the bright side - the fact that you're receiving bonuses (boni?) means your company is doing well and values your work…

  • I dont think a lot of companies are paying bonuses, so not getting a Negative amount is a plus.

  • I gather this is a smaller employer. This is very common practice in larger private sector organisations and has been forever.

    • No. Quite the opposite actually.

    • Well, the fact they've told everyone that "this is a discretionary amount & isn’t to be discussed amongst other employees" will make everyone talk. Unless everyone was told of a bonus individually, which might mean some weren't told of a bonus at all.

  • christine holgate are you now using ozbargain?

  •  

    A bonus is always "discretionary" unless your contract or EA says otherwise

    If they are performance based, your boss has to make a judgement on your performance, which means is pretty much subjective.

    Good luck fighting it, you will lose. They will bring up subjective criteria you will never win.

    The favorites always do better, the less favorite dont. Get used to it. Its life. It was hard for my to accept in my first year in professional life, but I understand the "system" now so its ez

  • I work for a large company and salary is very rarely discussed amongst staff. There are a few ways of getting some idea, and the disparity can be amazing. I know some hard working but very timid workers whom are getting absolutely ripped.

    There have also been a few loose lips late on some Friday night work drinks events…

    • This is why it’s better to be open about it, it just breeds resentment. Way too many companies pay more to get new people, the loyal ones get screwed (much like mobile phone contracts). It’s just the way it is, gotta pay what the market demands, but no company is going to voluntarily pay their staff more.

      Where I work has banding (not govt either) and it’s a great idea. Everyone has a set of tasks and needs the skills to do that job, so they get paid to do that job. If they do exceptionally well they get a bigger bonus and if they improve their skills they get promoted up faster. If they do poorly they get no bonus and performance reviews. Easy.

      • At my workplace it's similar (banding) but from what I've heard the bands are pretty broad and also overlap one another…

        And yes, no one at work openly discuss their pay like it's taboo.

  • The "isn't to be discussed" thing isn't legally binding. Quite the opposite, it's legally protected to talk about such things.

    I'm less clear on whether it's against the rules to say you can't talk about it or if there's any punishment for doing so. There's consequences for punishing employees for it, if it can be proven, but I'm not sure about saying you can't talk about it.

  • It's a bonus, not part of your salary. They don't have to give you anything just the same as they can choose what to give you and what to give your colleagues and there isn't a damn thing you can do about it.

  • Welcome to Australia, or maybe every company in the world. System is designed to drive you insane, work long hours and destroy your family life. Try to escape, many have failed.

  • Of course its legal. Everyone is presumably on or above award / minimum wage without the bonus. Everything else is exactly that, a bonus.

    As a manager who gives out discretionary bonuses it makes perfect sense. The problem with equal level pay structures is you generally put everyone on a similar level of job's pay up at once (at great cost when summed up), and some people aren't putting in as much effort as others who really deserve more than the base wage, so it can be hard to choose to do so.

    It's amazing how some people with a chip on their shoulder think they have a right to the same as others who put in way more effort, more carefactor and way more productivity to their jobs. I've experienced it regularly. You don't realise it until you become a manager - it's actually quite obvious who is performing well and who isn't and managers are always reviewing, talking about performance with one another. Even with constructive feedback, a number of people are their own worst enemy with bad work habits and don't meaningfully improve.

    The reason they say not to talk about it is because they don't want to exacerbate the 'but he/she got and I want' factor. Otherwise it would not be possible to reward excellent effort.

    For example, I know a fellow manager who put one person's pay up higher who consistently outperforms others in many ways, and was at risk of being 'head hunted' by other firms (and they didn't want to lose them)… but it wasn't said to keep it confidential and another person in a similar role found out (who doesn't put in any more effort than the bare minimum they can get away with) and demanded the same. He made a fuss so everyone in the team's pay got levelled up - which was never the plan. There was regret for rewarding the original outperformer. Especially during times like COVID where there are struggles to maintain paying the whole team the extra money - doesn't take a genius to guess the person who complained will be the first person made redundant if there have to be cut backs to reduce the team size with the smaller workload during a recession. They may have tipped the balance that lost them their job by increasing the cost of running the team until it became unprofitable in a downturn.

    It makes much more sense to reward over and above effort with a confidential discretionary bonus. It is an extra 'bonus' $s for extra 'bonus' effort the employer receives above the average output which is a nice and fair way to reward someone for going over and above. The base pay stays level and if there are economic cut-backs you can withhold doing something similar the following year. However if they weren't confidential i wouldn't give them out and no one would get any more.

    Don't be an entitled person who thinks everyone should be equal regardless of effort. Put in the effort if you want reward and be grateful for any bonus you get above the standard. If your employer gives you an extra bonus, they are also perfectly entitled to require you to keep it confidential - it's effectively a contract being entered when you accept the bonus pay (i.e. if you choose to accept it, which is basically a given)

  • It's always been discretionary no? Based on your performance.

    Also you are not supposed to discuss your salary and bonus…