Employers Choose Bonuses Over Raises
I wonder if there&#x27;s a need to read the entire article, because anyone who thinks a little bit about continuous costs and one off costs will arrive at the same conclusion as mentioned in the first paragraph:<p>&gt; a move that gives them more flexibility to dial back that compensation if the economy turns sour.<p>To add further, though salary cuts can be done by companies (this may vary across geographies), it&#x27;s usually a little more cumbersome and also sends a different message to employees. It&#x27;s a lot easier to put in vacation caps (thus chopping off the ability to use the provided compensation completely) or not pay a bonus. While bad for morale, at least some employees may not consider these moves as a loss from the status quo. That&#x27;s why different kinds of variable pay schemes is very attractive for employers so that they have several knobs to control.<p>As far as I&#x27;m concerned, employees should consider their base salary, benefits and some expected bonus as their fixed compensation so that they can better understand if the company is just skimming money and not rewarding their work because top executives want the bonuses for themselves (even when the situation looks like it wouldn&#x27;t hurt to give some additional compensation). This behavior is quite common in many companies, and is probably one of the reasons why the CEO to average employee compensation has become increasingly skewed over time and is getting worse.<p>On the other hand, given a choice, most employees would choose a salary increase (continuous increase) over an unpredictable and one off bonus or any other benefit that can be easily cut.