Getting the Skinny on Bonuses
Question: How much is the right amount to ask for as a signing bonus? Should a hiring bonus be a percentage of the first year’s wages? Based on the position in the company? A guess?
Does a position managing billions of dollars warrant a higher signing bonus than a CEO managing a $750-million-a-year business? I’m asking for my wife, who has been interviewing for a position in the financial services industry, but I’m also wondering for myself.
Answer: We’re in a new world where many workers have become free agents plying their skills to the highest bidders. In the tightest job market in three decades, job applicants are taking a page out of the playbooks common in sports leagues and among top business executives in asking for signing bonuses. And employers seeking top-tier talent are granting them. Within the last two years, hiring bonuses have cropped up in almost every industry where skilled workers are in demand--from school bus drivers to retail clerks, from network engineers to chief executives.
The trend is still relatively new, and human resources executives said there is no simple formula for computing hiring bonuses. In general, according to Michael Thompson, a managing director at the Hay Group, a Philadelphia firm known for its compensation research, workers are receiving 5% to 25% of their first-year base pay.
Dee DiPietro, chief executive of Advanced-HR Inc., of Saratoga, Calif., said it was once quite rare for high-tech start-ups to offer signing bonuses. But a recent study she conducted of the compensation strategies at 100 firms found that 18% of them said they often offer hiring bonuses, 65% said they do it sometimes and only 17% of the firms said they never did it.
“It’s a dramatic change in the way companies pay in the last two to three years,” she said.
DiPietro said job seekers can gauge their market value by the hiring bonuses they are offered. “It’s whatever the market will bear,” she said. “It’s negotiable, like everything else.”
Thompson said he would urge job seekers to be cautious, however, in making particularly steep demands. Like big-league pitchers, if “you’re going to play that game, you better deliver,” he said, noting that all-star pay packages demand all-star performance.
Q: I have been in the retail industry for 25 years, and last year I began working in the cheese department of a gourmet grocery store.
I’ve suffered taunts and harassment from three co-workers who made my life very unpleasant. I am a gay man, age 43, and the three men, all in their 20s, frequently bumped into me from behind, made close physical contact with me, waved cheeses at me in a sexual manner and made lewd references about me to one another.
After I complained to supervisors, they began making the same jokes to one another in Spanish. I have never worked with a group of people who treated me in such a hostile and disrespectful way, and where the team dynamics had such a negative spirit. One supervisor tried to help, but he was transferred to another store, and the other managers did not want to deal with the problem.
The company handbook said discrimination based on sexual orientation would not be tolerated.
A: This situation is “almost a textbook example of how an employer can render itself liable” to an employee lawsuit, said Washington lawyer Richard T. Seymour, director of the Employment Discrimination Project of the Lawyers’ Committee for Civil Rights Under Law.
Last year, the Supreme Court ruled unanimously that federal laws forbidding sexual harassment on the job cover misconduct even when the victim and the harassers are the same sex. Justice Antonin Scalia wrote for the court that “common sense” should prevail in deciding whether behavior is simply boisterous horseplay or “behavior so objectively offensive as to alter the conditions of the victim’s employment.”
Seymour said it appeared to him that the letter writer’s “life was being made miserable at work and he had been made an object of ridicule.” He said the case could be pursued as sexual harassment--or as a sex discrimination claim--because the company was failing to protect male workers from harassment it banned against women, or as a discriminatory violation of the stated company policy banning sexual-orientation bias. In addition, discrimination based on sexual orientation is explicitly prohibited in more than 100 jurisdictions. Seymour said that managers are obligated to step in and resolve discrimination problems that arise.
He added that even minor workplace assaults, such as purposefully bumping into co-workers, can lead to more serious violence if perpetrators aren’t punished.
“They are growing a potential tragedy,” he said.
--KIRSTIN DOWNEY GRIMSLEY
Kirstin Downey Grimsley can be reached via e-mail at downeyk@washpost.com.
