Q: It's bonus time for the group I oversee. Looking at my team members' reviews and performance, it's clear that Colleague A has higher scores than Colleague B and should receive a larger percentage of the fixed bonus pool. However, I know that Colleague B will quit without a satisfactory bonus level. I don't think Colleague A will leave. Replacing Colleague B will be expensive, including a recruiter's fee and the salary guarantee we'll have to give the new hire, which may diminish next year's bonus pool. What's the ethical way to handle these bonus calculations?
A: It’s important to think of this in terms of treating all employees in an equitable manner, but you might also be misunderstanding how your actions will affect team morale.
Your concern seems to centre on the trouble and expense of hiring a replacement if you don’t award Colleague B a high enough bonus, even if it's not merited by performance. But, consider how the rest of your team will take the news that your company gives bonuses based on anything other than merit. This sort of information always gets around the office, no matter how hard management try to keep it quiet.
“It is important to all employees that, as a matter of fairness, the rules regarding bonuses be clearly articulated and then followed by management,” said Denis Arnold, the Surtman Distinguished Professor of Business Ethics at the University of North Carolina, Charlotte, in the U.S. If not, your team members have less of an incentive to work hard, bring in new business, and devote themselves to the company. They will be more likely to spend too much time engaged in office politics — and to look for other jobs.
Paying Colleague B a higher bonus than Colleague A is a mistake, said Arnold by email, simply because it’s unfair to do so. Let the lower-ranked employee quit, if he insists on doing so: “If they quit, they will be doing you a favour in the long run as you can replace Colleague B with an employee more like Colleague A, the high performer.”
Yes, it’s a pain to hire a new employee. And it will cost you money you’d like to allocate elsewhere. But you and your team will be better off if you all agree on ethical norms and if you show them that bonuses correlate to success, rather than to squeaky-wheel behaviour.
“Changing the rules of the game after the fact to meet the demands of an unreasonable employee will lead other group members to become disgruntled and will likely result in the loss of high performers who value fairness and integrity,” Arnold said.
Work Ethic is a twice-monthly column on BBC Capital in which we consider the ethical and interpersonal dilemmas that workers face around the world. We welcome knotty questions from readers at email@example.com.
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