American companies refuse annual salary bonuses

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Companies in the United States are gradually abandoning the annual salary increase, because it has demonstrated its inefficiency in achieving the main tasks that were set before it: motivating employees and keeping them from switching to another company, writes Chicago tribune.

According to Ivron Esen, director of the Company's human resources management research programs, the annual salary increase by 1-2% does not affect the motivation or loyalty of employees to the company, since it is too insignificant.

Research shows that the best way to get more money is to advance your career or move to another company, and employees have already learned this. In addition, rewarding employees once a year does not make sense, since evaluating an employee’s work for a whole year, remembering all his achievements and failures during this period with a large staff of employees is beyond the strength of any manager.

Therefore, companies are looking for other ways to reward employees and gradually refuse annual bonuses.

One of the new options for rewards is bonuses, the frequency and size of which the company can adjust at its discretion.

At the moment, in some companies such bonuses reach 12,7% of the annual income of employees whose success, in the opinion of their employers, deserve the bonus.

In addition, this way of rewarding employees is beneficial to companies, because they cannot refuse annual salary increases, which should have been given to all employees, and in the case of bonuses, their amount, frequency and recipients are left to management. And in the case of a difficult year, the company may not pay any premiums at all.

According to human resource management experts, bonuses are one option to replace annual salary increases. Companies are now looking for other ways to reward employees, but in any case, employees should count on more frequent and flexible types of rewards.

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