Year-End Bonuses

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Year-End Bonuses

  • Posted by: Elizabeth

Compensation is always a hot topic. If you’ve looked at compensation news in recent years, you’ve probably seen the Gartner HR Research stat that only 32% of employees believe their pay is fair. Or Pew Research’s study from early 2023 that revealed that a mere 34% would call themselves extremely or very satisfied with their compensation. While compensation can include everything from salary to health insurance to PTO, we wanted to focus this month on one particular aspect of it: Bonuses.

If you’ve seen any news about bonuses recently, you likely read the articles about how they don’t “work.” Or maybe you saw the one about how year-end bonuses were down in 2023, a reflection of employers focusing less on employee recruitment and retention and more on saving money. We polled our community to see what their experiences of year-end bonuses have been for the last couple of years. 

As anticipated, nearly all of our survey respondents reported that their fiscal year has ended and they’ve received their bonuses or know they won’t be getting one. Per Gusto’s reporting, the percentage here of people who reported getting a bonus is significantly higher than expected with over 60% stating that they received one. 

In considering year-end bonuses and whether people were satisfied with theirs, one of our questions had to be able to quantify how much a person received (was it more or less than you received last year?), but an equally important question is about what someone expected to receive. Was their bonus in-line with their expectations? Above? Below? 

When cross-checked with our final question about happiness with their bonus payout, we found that, predictably, those who were above or in-line with their target were largely happy with their bonus payout–95% and 89% respectively. Those below target were very likely to say they were unhappy at 54%. Those who know their target all reported not getting or not having yet gotten a bonus, and those who didn’t know it were also very likely to report not getting or not having yet gotten a bonus. However, if they did receive a bonus, they were pretty equitably split between being happy or unhappy with it. 

The number of people reporting receiving more for their most recent year-end bonus is surprising given how bonuses have been trending down in recent years. Similarly, those who received the same bonus amount is surprising. If anything, we would expect the numbers for those receiving less and for those who received a bonus last year but not this year to be much higher. 

If you’ve looked at any compensation-related news, you’ve likely seen the word “satisfaction” come up time and time again. Or more accurately, you’ve seen the word “dissatisfaction.” The price of everything rises and so too does the average person’s expectation of what they should be paid for any given good or service. Recent reporting from Bloomberg revealed that the average salary a candidate expects in order to accept a new job has risen. 

One would expect that a similar story would play out with bonuses. However, they’ve been on a downturn. Bonus payouts have been less. Companies offering bonuses have slowly been ticking downward as well. At the very least, one might expect that there would be a lot more dissatisfaction with bonus payouts than we’ve seen in our survey. 

The percentage reporting that they were unhappy with their bonus is remarkably low given the current state of employee satisfaction with compensation. Excluding the section who didn’t get a bonus/haven’t yet, those stating that they were happy with their bonus payout made up 81% of our survey respondents. 

Given how much there is to discuss within the topic of compensation, you can expect to see more from us in the future. Thank you to everyone who participated in our year-end bonus survey! Look out for our upcoming surveys by subscribing to our newsletter and following us on LinkedIn