Justify Your Bonus

There are lots of threads about comp/bonus numbers but I want to ask a slightly different question:

Why do you deserve your year end bonus?

It would be helpful to know specific role/type of real estate and % of comp but not absolutely necessary. I’d start but currently struggling to answer that question.

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6y

You don't "deserve" a bonus--that's just how much of the industry structures its comp. It's an evolved process that doesn't necessarily have a continuing logical justification. For example, the idea that employers handle health insurance isn't particularly logical. During WW2 there were price/wage freezes enacted by the federal government, so health insurance/care became a benefit added on to increase compensation to employees. That has remained--illogically--as part of many comp structures for 70+ years because "that's the way it is."

A lot of bonus structures are so liberal that they are essentially guaranteed (mine is like that)--like, the company would have to collapse for you to not get paid a bonus (we saw this in 2008 at places like Lehman). Some are tied to the overall performance of the company, which you likely have nominal--likely no--direct impact on. Unless your bonus is directly tied to your specific performance (e.g. your sourced deals) then the bonus structure is there largely because that's how it's done.

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I quit this site because of censorship

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6y

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Mg33:
Not really; modern social welfare policies began in Germany during the 1880s under Otto Von Bismarck. Pension plans, along with disability and health insurance plans, were introduced by the conversative Bismarck to ease pressure from the Social Democrats and other leftist parties. The justification - besides the humanitarian perspective - is it makes employees more productive by providing security that keeps them focused and less distracted.

Huh? Not sure what you're arguing. I'm completely confused. Did you respond to the wrong person?

Mg33:
I agree that bonuses aren't deserved, but in no way are they illogical. They're a natural incentive structure to keep the employee focused. Even if part of it is assumed beforehand, there's still a nagging doubt and "what if" in the employee's paychology that forces them to at least look like they're working hard. If I'm ambivalent to my job and company, I'd stay more diligent knowing that part of my pay is discretionary... keeps you focused on a carrot

You completely missed the point. It's not that bonuses are illogical, it's that the bonus structure is illogical IF the bonus is not directly connected to employee performance. We have an evolved culture now where your pay is, say, $100,000 per year, but it's structured as $85,000 + $15,000 bonus, regardless of your performance (so long as you aren't grossly incompetent, at which point you'll be fired anyway). It's no different than a salary of $100,000--it's just called $85 + $15. That's the point. The $15,000 isn't "earned"--it's just part of your salary, structured in a way that really doesn't make logical sense.