MiddletownJournal.com

That annual bonus you look forward to each year may not be in your best interest. Given a different roll of the dice, you may be getting shortchanged.

A number of companies have installed incentive plans linking performance to compensation and award bonuses annually to those employees who exceed the standard. That sounds decent, except that the method for calculating the bonus can impact the amount of money you receive and even result in no additional compensation whatsoever, even though your performance over most of the year was above par.

When negotiating a job offer with a bonus plan, it is critical to discuss the frequency by which the employer will measure your work. Consider the following two examples:

Derek is hired as a manufacturing shift supervisor and advised by the company that if production exceeds 100,000 units per year year, he earns a 20 percent bonus. The first year, his plant experiences a poor first quarter and produced only 97,500 units for the year. This poor first quarter eliminated any bonus for Kevin although the plant in succeeding quarters posted outputs of 25,500, 29,000 and a record 31,000 units.

Rebecca on the other hand takes a position as a call center supervisor. Her compensation package offers a five percent bonus if her workers complete more than 25,000 calls per quarter. Similar to Derek's package, that annualizes to 100,000 calls a year. In the first quarter, Rebecca's staff generates 30,000 calls and in succeeding quarters 27,000 and 28,000 respectively. The fourth quarter, however, falls short. High absenteeism, worker turnover and telecommunication system problems cut output to 10,000 calls.

For the year, Rebecca's organization processed 95,000 calls. If she were on Derek's bonus plan, Rebecca would not qualify for a bonus. But since her compensation was based on quarterly performance, she earned an additional 15 percent.

Bellbrook resident Steve Stromp is a professional career consultant, lecturer and writer. Contact: stromp@sbcglobal.net.