Cape Town - Although the economic environment remains
strained, the latest Jack Hammer Corporate Survey reveals that companies are
sticking with their bonus culture – and their obligations – even though company
performance may be tepid.
Throughout the year, many have been faced with the prospect
of a bleak festive season as news broke of tough trading conditions, and the
chance that packages would be frozen and bonuses slashed. In SA, top staff have
felt ongoing pressure on their packages as salaries and bonuses have taken a
continued battering from the ripples of the 2009 financial crisis.
Asked whether their staff would be receiving a 13th cheque
or bonus this year, 100% of the companies polled said yes.
The survey was conducted among South Africa’s top corporate
employers and entities polled ranged from banking, wealth management and FMCG
sectors, as well as government, manufacturing and insurance.
All respondents indicated that their junior and mid-level
staff would be receiving end of year sweeteners, said Debbie Goodman-Bhyat, MD
of Jack Hammer Executive Headhunters. “But what needs to be kept in mind is
that many companies are contractually obliged to disburse 13th cheques
regardless of performance,” she said.
“I would not say that the response indicates an easing of
the extreme belt-tightening experienced over the past few years,” said
“Rather, companies have recognised that to withhold the
expected 13th cheque because markets are tough becomes a big issue with staff
morale and ultimately productivity and staff retention.”
According to the survey, 75% of companies polled indicated
that employees would receive end-of-year bonuses or 13th cheques, while bonuses
linked to staff performance would also be paid should the company show a
What was clear was that in all sectors, from investment banking
to manufacturing, performance or profit share bonuses would be paid out to
senior staff where individual and company performance targets were met – but
that the expected sums are set to be smaller than they would have been prior to
the global financial crisis.
“Since then, bonus sums have consistently remained weak. The
bonus structures, formulae and ‘potential’ have not changed, but the amounts
disbursed have in almost no instances reverted to pre-2008 highs,” said
“Nevertheless, hope remains; because we still have executive
candidates discussing their bonus ‘potential’ and the sums they used to receive
3 or 4 years ago when negotiating offers with a new employer. However the new
reality has set in and a ‘new normal’ in terms of bonus payouts is emerging,”