Unfair Bonus Policy? What do you think?

[Obi-Wan Pinobi]

I thought I would get your opinions about a couple of bonus opportunities that were presented to DW early this season, that we have found out some discouraging news on.

First off, she was told that if she made her stretch goal in sales (comp plus 16%) she would earn $1000 for both November and December - so a $2000 bonus. As they got further into the season, it became apparent that DW didn't have a snowballs chance to bonus. The product was emptying off the shelves and nothing else was coming in - and she was only doing comp plus 7%. When she had a chance to do some rough figures, she realized that there was no way that she could have EVER bonused. The company never provided them with product equalling the dollar total she had to sell to bonus. She approached her boss with this and said "Am I crazy or did I never have a chance of making that bonus even if I sold every last item off the shelf?" The boss told her "You're not crazy, you wouldn't have bonused no matter what you did"

Then a second bonus opportunity - they have a special CD they are selling this year with Michael McDonald on it. Last year, DW won the CD contest with James Taylor but only prize was a free day off. This year the prize is awesome - a 4G Ipod, $100 gift certificate AND Michael McDonald himself would come visit you at the store! She checks out her goal (you had to sell the most over your goal) and does an inventory - she is short 200 pieces of inventory JUST to make her goal! They didn't even order her enough to hit her goal, no less allow her the chance to maybe win the contest.

This comes after a yearlong contest that has been going on every year for the past 5 years - the Presidents club. The winners of this contest get an all expense paid trip for two to WDW! (Beach Club accomidations). DW was a frontrunner coming into the home stretch in November. It looked like she would win. Guess what? She gets a letter mid November with 6 weeks left in a 52 week contest telling her they cancelled Presidents club.

So what do you think about these bonuses? Not very fair practices if you ask me!

 

[bicker]

The first two aren't especially unfair. There have been many years where the finances were so bad that the bonus programs I was subject to basically calculated out into it being impossible to earn the bonus. That's not unusual.

If the President's Club bonus was a published part of compensation, then I believe the company does have an obligation to terminate it with sufficient notice. 6 weeks seems a little thin. How was the promise worded?

 

[The Mystery Machine]

Just wanted to say HI!

I don't know how sales people do it??? My dh is in tech sales and his bonus this year?
You get to keep your job. UGH....To top it off the rumor is going around that they are going to pull Comps. Wow, what a move.

When he first started working at this company 7 years ago they gave money, goodies, (incentives) etc....now nothing. It really stinks.

Just wanted to say I feel your pain.

 

[Obi-Wan Pinobi]

The first two aren't especially unfair. There have been many years where the finances were so bad that the bonus programs I was subject to basically calculated out into it being impossible to earn the bonus. That's not unusual.

If the President's Club bonus was a published part of compensation, then I believe the company does have an obligation to terminate it with sufficient notice. 6 weeks seems a little thin. How was the promise worded?

On the first two - the bonus offer was sent to them the first day of November. Well after all the product had shipped in and well past the point where they knew what sales each store were capable of based on how much product they received. The CDs had been in the stores for 2 months prior to the goals being sent out. All the stores received goals higher than their stock levels. To me, that is shady - to present a bonus opportunity that they know is physically unobtainable? Just hoping that the majority of the managers won't do the math and realize it?

Not sure on the President's club one. I'll have to check with DW

 

[bicker]

On the first two - the bonus offer was sent to them the first day of November. Well after all the product had shipped in and well past the point where they knew what sales each store were capable of based on how much product they received.

That actually makes it sound more fair, to me. I had originally inferred that, after the bonus programs were outlined, your wife ordered sufficient inventory to make the goals, but her order was refused. What it sounds like now is that she was never on-track for the programs, at the time the details were announced, the gap was simply too large to overcome with current inventories, and there wasn't sufficient time to increase inventories. Do I have that right?

It would be unfair in my opinion to offer different bonus terms to different sellers based on their current sales, unless the potential reward was also proportional (i.e., folks who had already sold more would earn more for selling more).

Just hoping that the majority of the managers won't do the math and realize it?

Are you sure that none of them were on-track for that bonus. Regardless, like I said, I've been subject to bonus programs before, where the terms of the program were set mid-way through the year, based on how well the company was doing (and indeed even strategic decisions for the coming year), and in many cases the goals were absolutely unobtainable (for anyone). That's just the way the numbers work out some years.

I sure hope everyone is as smart as you to do the math, before they get their hopes up. By the same token, is there really anything the should do differently, based on the math? Should they work less hard as a result?

 

[zippeedee]

After reading the other thread about what she has been subjected to, none of this sounds fair to me. Is that really the only job she can get? What is keeping her there? I've worked for the same company for 22 years, so I understand loyalty, but it only goes so far when your loyalty is returned with abuse, bad management and unattainable goals.

 

[Pig Pen]

I agree with Zip...if the company is going to offer incentives, they need to make sure they can provide the product! Years ago I worked in a factory where I was paid minimum wage, but was told that high production would be rewarded. After working there a few weeks I realized I would never be furnished with enough product to make anything over the minimum wage. I felt that they were pulling the wool over our eyes.

 

[bicker]

Is that really the only job she can get?

This is a really good point. We each have a responsibility to ourselves to evaluate the options open to us and put ourselves in the position which is best for us.

 

[Dee & Greg]

In my past life, the company had a President's Club trip each year. I won it one year, and DH and I had an all expense trip to Vail. Wonderful!
The next year, the trip was to Cancun... all year long the corporate marketing folks sent us reminders... postcards, emails, posters, and even a small deck chair with the President's Club logo screenprinted on the chair cover.
One month before the trip... poof... they cancelled the program. One on the reps in my office was a sure bet to win that year.
We held a bonfire in the wastebasket of all the little wooden chairs. No joke.

It's all bogus...most of the people who had won the trip in the past (present company not included), were new reps with tiny goals. The established reps with huge goals who were just 110% didn't win. It's easy to be 200% of a tiny goal... get it?
Now I work for a company with no trips, but a straight-up, easy to understand commission program.

 

[Obi-Wan Pinobi]

That actually makes it sound more fair, to me. I had originally inferred that, after the bonus programs were outlined, your wife ordered sufficient inventory to make the goals, but her order was refused. What it sounds like now is that she was never on-track for the programs, at the time the details were announced, the gap was simply too large to overcome with current inventories, and there wasn't sufficient time to increase inventories. Do I have that right?

The inventory problem is not the fault of the managers in the company. They are forbidden to do any ordering on their own. Had the contest said she had to sell 450 of product "X" and she was responsible for ordering it and only ordered 300 - that is her fault plain and simple. But that isn't the case here. She is not allowed to actually buy product for the stores. This is taken care of by buyers in another state. DW has even been begging for more product since before the bonus was issued only to hear the "sorry, nothing left to send you" speech. Then why even BOTHER coming up with this last minute challenge for them?

To make a sports analogy, it's like telling the batters in the home run derby before the All Star Game that to win they have to hit at least 10 home runs, but each batter will only receive 8 pitches. Even if they homer every single pitch, they still can't hit their goal. They can't control the pitcher and have them send them more balls to hit.

This is not something they always do. This is not something that had been planned for months. It was a last minute thing they threw out to the managers on a voicemail from the President followed by a Fed Ex letter.

For those asking why she stays in this job - it's pretty simple. She's stuck between a rock and a hard place. I was laid off last year and have had tremendous difficulty finding a job in my field. I've taken a retail job in the meantime to make sure that some money is coming in. DW is very sick. She's got an aggressive, destructive autoimmune disease which requires her to take thousands of dollars worth of medicine a month. Her job provides her with a pretty good insurance that will allow her to see any doctor she needs and have any test for $20 without a referral. Since trips to the hospital to see her specialists are a monthly thing, that's important. Plus this job gives her a month's paid sick time every year. She doesn't use it but it's nice to have as a safety net should she ever get really bad.

So it is not always easy to walk away from a bad situation. You have to weigh the pros and cons. And unfortunately, the cost of healthcare for someone who is very ill can devestate a family. Sad situation, but true.

(Plus she said this dingleberry running the company can't last forever with how much money there are losing so she's hoping it will get back to the way it was a few years ago... )

 

[Obi-Wan Pinobi]

In my past life, the company had a President's Club trip each year. I won it one year, and DH and I had an all expense trip to Vail. Wonderful!
The next year, the trip was to Cancun... all year long the corporate marketing folks sent us reminders... postcards, emails, posters, and even a small deck chair with the President's Club logo screenprinted on the chair cover.
One month before the trip... poof... they cancelled the program. One on the reps in my office was a sure bet to win that year.
We held a bonfire in the wastebasket of all the little wooden chairs. No joke.

I just told this to DW and she told me they had been doing the same thing to her. Post cards, trinkets, etc. Followed by a letter saying "ehh.. too much money this year. It's cancelled"

 

[bicker]

They are forbidden to do any ordering on their own.

So it was just a matter that your wife was never on-track for the bonus program. Was no one in the company on-track?

Then why even BOTHER coming up with this last minute challenge for them?

Probably to provide incentive for closing more sales in this fiscal year.

Her job provides her with a pretty good insurance that will allow her to see any doctor she needs and have any test for $20 without a referral. .... Plus this job gives her a month's paid sick time every year.

That sounds like this isn't a bad situation at all, especially given your wife's tragic circumstances.

(Plus she said this dingleberry running the company can't last forever with how much money there are losing so she's hoping it will get back to the way it was a few years ago... )

Or drive it into bankruptcy. I'd rather look at it the other way: That the decisions being made may not be the best for the individual workers, but may be what is necessary to keep them employed.

 

[Obi-Wan Pinobi]

So it was just a matter that your wife was never on-track for the bonus program. Was no one in the company on-track?

In talking to quite a few other peers, DW had the best shot at making this bonus and she isn't even in the playing field. She's got peers running 50K behind as of last week with the biggest week to go. DW is only 10K behind. But when looking at inventory, there isn't even enough product to hit this week's projection, no less make up the 10K. And someone from corporate even admitted to the fact that there was no way any of them would have bonused anyway.

Or drive it into bankruptcy. I'd rather look at it the other way: That the decisions being made may not be the best for the individual workers, but may be what is necessary to keep them employed.

They aren't going anywhere. They are an outlet for one of America's biggest manufacturers. There is no way in you know where these stores are going anywhere unless they sell some to independant retailers, which the owner of the company (it's privately owned) has stopped. They used to use that as a "get money quick" trick.

I have to wonder if this division is nothing but a big tax writeoff for the company and they never wanted it to succeed.

 

[bicker]

That seems plausible, and would explain the bonus program: They're looking to clear shelves, and perhaps they consider their staff, your wife clearly the exception, as not being sophisticated enough to know that the bonus program wasn't going to pay off for them. However, I'm still wondering what you think folks who do realize this should do, in light of the realization.

 

[Obi-Wan Pinobi]

I haven't formed an opinion on what I think they should do. That's not my place, it's not my job. But according to DW, I think what a lot of other people plan to do is hit the road. She's already seen a bit of action with people leaving at an unusually high rate.

 

[bicker]

And if, as you speculated, the division is nothing but a big tax writeoff for the company, that would fit with the company's strategy. Makes sense.

 

[luvwinnie]

This company really worries me.