Employer faced criticism over bonuses for senior executives
The Canadian Broadcasting Corporation (CBC) will no longer issue individual performance-based bonuses to its employees, the employer announced, according to a report.
The Crown corporation would eliminate “performance pay” and adjust salaries of affected non-unionised staff, including senior executives, reports The Canadian Press (CP).
The development comes as the CBC faced criticism over executive compensation in the past years.
The CBC disbursed over $18 million in bonuses in fiscal 2023-2024, even as it eliminated over 200 vacant positions and laid off 141 workers, according to a previous report. Documents obtained through access-to-information requests revealed that CBC/Radio-Canada awarded bonuses to 1,194 employees during that year, Global News noted.
Early in 2024—in the face of impending layoffs CBC said its executive team will not be receiving “so-called bonuses” for the fiscal year. However, they may or may not be eligible for “incentive pay”.
In late 2023, the Standing Committee on Canadian Heritage called out the planned bonuses to CBC's executives after the public broadcaster announced plans to cut jobs.
‘Midpoint of the market’
The development follows an independent review by Mercer Canada of CBC’s compensation for non-unionized employees, including senior executives, according to the CP report posted in CTV News.
The review noted that while the CBC is generally aligned with other companies and private sector organizations, the bonuses have “faced scrutiny.”
If CBC decides to get rid of its performance-based incentive program, “the broadcaster should take steps to ensure compensation stays in the “midpoint of the market’,” CP reported.
Pros and cons of performance-based compensation
According to performance management software provider PerformYard, performance-based compensation has its pros and cons.
It notes that adopting a pay-for-performance model can offer numerous benefits for both employers and employees, including:
- Higher motivation and productivity.
- Improved performance and results.
- Clear expectations and accountability.
- Attraction and retention of talent.
- Workers’ alignment with company goals.
Meanwhile, it also presents the following challenges:
- Perceived unfairness and bias.
- Complex implementation.
- Unhealthy competition or culture impact.
- Short-term focus and neglect of other priorities.
- Factors beyond employees’ control.
Here’s how to build a competitive compensation package.
