This week is BONUS week, OH YEAH – what this means is we finally learn of our reward for all the hard work and efforts of the previous financial year. When our employer looks at us in the eye, smiles a fatherly smile and whispers “you are valued”.
YEAH RIGHT, PULL THE OTHER ONE SONNY.
When I first started my career, people kept on repeating to me the mantra that the “bonus” is what you worked for, a big fat pot of gold handed over to you at the end of the year.
I soon realised that the word “bonus” was prefixed by the word “discretionary”. Discretionary means your employer’s overall performance must be sufficient enough to warrant a bonus pool. Discretionary means that there are certain KPI’s you must achieve in order to be eligible for a bonus. Discretionary means that you must adhere to the behaviours and values of the organisation in order to receive a bonus. Discretionary means that your boss must like you in order for them to give you a bonus.
In my career, I have received full discretionary bonuses, partial discretionary bonuses and nil discretionary bonuses. On all of these occasions I was working to my fullest capacity because hey, that big fat pot of gold isn’t going to be just handed over to you right?
WRONG – that big fat pot of gold IS going to be handed over to you because you have it already. It’s just sitting there untouched.
For that pot of gold IS you, you need to learn to bring the pot to boil, you need to learn to add the ingredients in, you need to learn to let the pot stew in its own time and VOILA magic happens.
One of my favourite gurus Jim Rohn stated “Learn to work harder on yourself than you do on your job. If you work hard on your job you’ll make a living, if you work hard on yourself you can make a fortune.”
When I first heard this quote years ago it didn’t make a lot of sense, what a pompous wanker – work hard on yourself, uh huh – thanks Captain Obvious. I went to work the next day and applied myself as I always did. Then the next day and the next until the end of the year when I rubbed my hands in glee at the thought of a juicy, fat pay cheque, I’M RICK JAMES BITCH.
My manager sat me down and began:
“TheFrugalSamurai (not my real name), as you well know the economy hasn’t been performing strongly in recent times which is reflected in our end of year results. Our clients although loyal have not generated anywhere near the revenue as per previous financial years. Subsequently our bonus pool this year has shrunk significantly…”
After that experience I made a promise to myself that surely there is a better way of getting ahead than relying on bonuses and pay cheques and Rick James.
That’s when I started my investment journey. At first I took baby steps, I borrowed some investment books from the library and started reading them to and from work. Then I started reading them during my lunch breaks. Then I started reading them when I arrived home, on the weekends, when I had spare time. Before long I couldn’t wait for those hours OUTSIDE of work so I could be utilising that time to read and learn and be more educated.
You know what? It didn’t make the slightest difference to my output at work – in fact I’m more motivated when I am there because I can’t wait to smash it out and then get onto more learning! Game of Thrones or Penrith City Development Control Plan? No Brainer!
Do you come home at the end of the day and pat yourself on the back for a good day at work? Feel happy because your boss praised you for a task well done? Smile to yourself because you’ve been working hard for that bonus at the end of the year and you can see it, touch it? Trust me I’ve been in those scenarios many times.
Too many of us are working hard for others, working hard for our managers, working hard for our jobs. Yet when was the last time you worked hard for yourself?
The discretionary bonus you receive is manifested from so many variables, the economy, the employer, the customers, the boss. Why not work hard on something that is guaranteed to make you a fortune?
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A euphemism for “performance inducing bribe” or more commonly known as “Dangling a carrot”.
I stopped believing in bonus ages ago, not because I don’t get bonuses, but because it’s just another form of manipulation used by the employers to simply induce more work out of you. And also seeing inept CEOs routinely cutting themselves a big, fat cheque at the end of the year when all they have done is “not running the company into the ground”… thank you and come again.
You know what I’d rather get? An employer who’s willing to invest in me… pay for my study, pay for me to travel for work purposes… time to cut a deal with the devil I say!
The Frugal Samurai
Very true and very glad you have realized this fallacy! Ancillary benefits is where its all that these days and the smart ones negotiate a better all-round package during their performance review/job commencement.
That’s why when companies talk about offering you such and such “package”, you really have to dig a little deeper and find out what exactly the base salary is and comes with the position. If I have a choice, I’d take company phone, car allowances, laptop, further training etc. over bonuses every day of the week.
All part of life lessons after previously getting screwed over. Part of the life-long learning process.
Interesting. Low level employees get ‘discretionary’ bonuses, but senior executives are almost guaranteed a bonus. Food for thought: http://www.abc.net.au/news/2017-09-04/when-did-executive-bonuses-become-standard-and-not-earned/8868508
The Frugal Samurai
Good article, highlights the sub-conscious shift from earning bonuses through outperformance compared to earning bonuses through entitlement well.