I just don't understand the mentality behind looking for reasons not to pay out bonuses. I see it all the time. It baffles me. When people have credible claims to incentive compensation, just freaking pay them. Almost by definition, we're talking about sums of money with very little marginal impact on the company; those same sums often have unpredictably huge impacts on employees.
Forward-looking, employees-only, whatever: not paying is more costly than paying. It sure as heck is here, because this ended up being Miso's introduction to a huge swath of potential candidates down the line. What a debacle.
If you have legitimate concerns about abuse of bonus programs, the problem is with the structure of your bonus program, not with how you enforce payouts.
> Almost by definition, we're talking about sums of money with very little marginal impact on the company; those same sums often have unpredictably huge impacts on employees.
This should be the way every employer sees bonuses. The have huge potential negative and positive impacts, with most of the negative being mitigated by adhering to the rule, "don't be a dick." When in doubt, pay them anyway. The complex positive effects you can't ever fully predict will almost always outweigh the minor negative and predictable impact to your bottom line.
Same goes for not giving refunds to customers, and using the right-hand lane to attempt to pass on the highway. It might seem like the best thing to do at the time, but some unpredictable event out of left field will put you three miles back and cursing your short-sighted decisions before you can say "Oldsmobile."
It's really not the same as giving refunds to a customer. Keeping your customers happy is really important. Keeping your employees happy is also important. Keeping ex-employees happy is really not that important. Personally I might have paid it out, after all they got the referral so it's fair. But it's not MY company's money. In my experience as a games programmer bonuses were very rarely paid to people that left. The soul reason for them is employee retention and when the dude has gone he's gone.
"Keeping your employees happy is also important. Keeping ex-employees happy is really not that important."
I wonder if the people making the "lets not pay him" decision have discussed the issue with the people who are hiring their next employees for them? (Or the managers who're asking existing employees to refer friends with referal bonuses of now dubious reliability?)
> It's really not the same as giving refunds to a customer. Keeping your customers happy is really important.
Reason for giving refunds is because it is the right thing to do. That is what should be the basis of decision. Otherwise you run into troubled waters as soon as you need to choose between 2 parties. Who should you make happy? Customer or the investor? Customer or the employee? employee or the investor? And such situations arise all the time.
> The soul reason for them is employee retention
But that is not the reason for referral bonus. Its aim is to encourage people to refer their friends for hiring. By doing this, do you think Miso has achieved the desired effect on the current employees? To put it more bluntly, do you want your employees, who have a possibility of leaving with in 6 months time frame to refer their friends? Given how difficult hiring is and if they are looking to hire, I would pay the referral bonus even if they left before it can be claimed.
Forward-looking, employees-only, whatever: not paying is more costly than paying. It sure as heck is here, because this ended up being Miso's introduction to a huge swath of potential candidates down the line. What a debacle.
If you have legitimate concerns about abuse of bonus programs, the problem is with the structure of your bonus program, not with how you enforce payouts.