A recently conducted survey found that Kiwi workers are more inclined to gamble with their base salary if it means they have the opportunity to earn more through performance-based bonuses.
According to the research, 68% of Kiwi workers would take a cut in their base salaries for the opportunity to potentially earn more through performance-based bonuses, while 59% of Australians said the same.
The survey, which had 1510 respondents, found that 46% of Australians would take a base salary cut of up to 20% if they could receive such bonuses, while a further 13% said they would do so if the cut was over 20%.
The remaining 41% said they preferred not to gamble their earnings at all, and would opt out of performance-based bonuses in exchange for a higher base salary.
New Zealanders’ responses to the survey suggested that the Kiwi workforce is more secure in its belief that their performance could earn them more dollars.
Sixty per cent of New Zealand’s respondents said they would take a base salary cut of up to 20% for performance based bonuses, with a further 8% saying they were willing to cut their salary by even more. Just 32% of Kiwis were not prepared to compromise their base salary.
“Understanding how people weight the various elements in a compensation package can be a great attraction and retention advantage,” said Nick Deligiannis, managing director of Hays Australia and New Zealand. “After all, a compensation package consists of more than just salary. However, there is no one-size-fits-all approach to compensation packages and employers should work with a candidate to tailor an offer that has the best chance of retaining them long-term.”
Deligiannis added that performance-related bonuses offer advantages to both employers and employees.
“A performance-related bonus rewards employees for good performance and can be very motivating for employees as they have a vested interest in achieving a top result,” he said. “For employers, this can motivate their team to work at peak efficiency. Such bonuses work best when both the employer and employee are aware of the objectives that need to be met in order to qualify for the bonus, which is why they are often tied to performance appraisals.”
He also warned that employers must be clear of their expectations to ensure that such deals remain mutually beneficial.
“The minimum performance expectations must be made clear, otherwise an employee may not feel they are being rewarded fairly for their performance,” Deligiannis said. “Communication is essential to make sure both sides are fully aware of the objectives that need to be met in order for performance-related bonuses to be awarded.”