Bonuses caught in crosshairs (Editor’s notes)

HR must prove value of bonuses and recognition in tough times
By Todd Humber
|Canadian HR Reporter|Last Updated: 04/02/2009

Employee bonuses are under fire, thanks in large part to the bungling of American insurance giant AIG. The firm is facing a public relations disaster over its payment of more than $200 million US in bonuses to workers after receiving hundreds of billions of dollars in rescue aid from the United States government.

Unfortunately, this isn’t just AIG’s problem — it’s also your problem because solid HR practices everywhere are taking collateral damage in the wake of the justifiable public outcry. Until a few weeks ago, most people outside HR didn’t know much about retention bonuses. Now, thanks to the spotlight of the 24-hour news cycle, everyone knows what retention bonuses are — and the public sentiment towards them isn’t exactly positive.

Reuters news talked to ordinary Americans about the bonuses last month and the reaction from Dave Blank, a medical supplies salesman in Wisconsin, pretty much summed up the mood: “I always thought bonuses were contingent on a job well done, not for simply showing up or mindlessly driving the company over the cliff.”