why didn’t I get a bonus this year?

by Ask a Manager on December 26, 2012

A reader writes:

For the last two years, I have received year-end bonuses (second year was larger than the first) for my work. After thanking my boss for them, each time he has said, “You deserve a lot more and hopefully next year’s will be larger.”

Now, I never expect a bonus, but this year we went through a merger, and as his assistant, I did all of the re-papering of accounts (greater than 300 accounts with 5 pages of paperwork each on average) and other administrative tasks for the merger, on top of general day-to-day operations not related to the merger (sales and customer relations are the two drivers of this business). Without my help, he would have been out of business for at least a month, and 2-3 months in a worst case scenario. Due to my efforts in preparing, we were “dead in the water” for less than 2 weeks after the merger took place.

Even with the hassles of a merger, we grew the business by 15% this year. I am a critical part of his business model as I assist, but also consult him on marketing and business strategies. I’m a “jack of all trades” in the office, if you will. This year I did not receive a bonus, even though the business produced more profits than either of the last two years.

Should I take this as a sign that my work is no longer appreciated? It’s worth noting that my pay is tied to gross revenue (not salaried), but revenues have grown every year I’ve worked for him and I still received a bonus in spite of my “base” growth. I don’t want to ask if I’ve done anything wrong because I don’t want to seem selfish… but I do feel a little under-appreciated considering the amount of effort I’ve put in this year comparable to other years.

Ask.

You can ask without seeming like you feel entitled to a bonus, and you really should, because you’re reading a lot into it that might not be there.

Say something like this: “I know we’ve typically done end-of-year bonuses, but I haven’t heard anything about them this year. I don’t want to sound as if I think they’re automatic, because I understand that they’re not — but I also want to understand whether there’s anything about my work that might have resulted in me not getting one this year, or whether there are other factors at play.”

If you’d only ever received a bonus once, I wouldn’t suggest saying this; in that case, it might have been a one-time thing and you shouldn’t assume it was something that might happen regularly. But because you’ve received one two years in a row, and especially because each time your boss referred to “next year’s,” it’s reasonable to inquire.

When you raise this, however, make sure that you’re doing so with the understanding that bonuses truly are bonuses; they’re not an expected part of your compensation unless you have an explicit arrangement to that effect. There are many reasons unrelated to your performance that a company might not give them out, even when they have previously (especially in the case of a merger; there may now simply be different practices), so you don’t want to sound as if you feel entitled to one or as if you think it’s a slap in the face that you didn’t get one. And you really shouldn’t feel that way either, at least not before you’ve had a chance to talk to your manager about it.

So just ask, and see what your manager says.

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{ 20 comments… read them below or add one }

Editor December 26, 2012 at 4:21 pm

You went through a merger. Is the new company now in charge of your operation or the payroll? If so, the bonus protocol might be different or the new company may not offer bonuses.

After the merger, was there a new employee handbook and did it say anything about bonuses? Is there a formula for computing bonuses and is it different than when your operation was independent?

Also, after the merger, did the fiscal year change? If the fiscal year and the calendar year are different now, that could affect when a bonus is paid out.

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Jamie December 26, 2012 at 4:31 pm

The fiscal year change was the first question that popped into my mind.

Also – some people use merger when they mean acquisition. Did you instead acquire (or were you acquired by) another company? This could totally change the bonus structure.

That said as much as I fully understand that a bonus is not part of compensation, and I never see them that way…if they have been customary in the past and reference was made to “next year” ideally the boss would have addressed why one wasn’t forthcoming.

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Josh S December 26, 2012 at 8:33 pm

Yeah, there’s really no such thing as a pure ‘merger’. Someone is getting acquired, and someone else is doing the acquiring. You can usually tell which is which in public companies because the shareholders of Company A all of a sudden get told that they’re getting cash/shares in Company B. In that case, Company A is getting bought out by Company B.

(I was going to say that the Continental/United merger was a big exception to this, because they merged systems, combined logo/names, etc. etc. etc. And they even changed their legal name to United Continental Holdings. But the surviving stock remains the old United Airlines {UAL} as listed on the NYSE for a long long time. So Continental was technically acquired by United, though they really did a good job of making it a merger of equals in a lot of ways… but I digress.)

Obviously, this is a lot harder to tell when it comes to a private company. Even, at times, for employees.

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BW December 26, 2012 at 10:31 pm

First thoughts exactly. My company was acquired recently and *everything* changed, including the bonus structure and the way performance reviews are conducted. We were notified though, because we had a bonus payout as part of our compensation package under the old company.

Other places where I have worked had no real official bonus programs and it was not part of the compensation package. Some years you got something. Some years you didn’t.

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Sam December 26, 2012 at 4:26 pm

Did anyone else receive a bonus? With a recent merger, I wonder if the company has changed the bonus system without communicating this to the employees.

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AdAgencyChick December 26, 2012 at 4:26 pm

It probably has to do with the fact that there’s a merger involved; mergers mean new people are in charge, often ones who have different ideas about who should receive bonuses and how much than their predecessors.

Which doesn’t mean you should just wonder whether that’s the case, or assume that it is. I think Alison’s advice about how to ask about it is spot on.

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gretta December 26, 2012 at 4:59 pm

I’m 33 years old and have worked for large and small companies for the past 13 years…and i’ve only ever gotten a bonus ONCE. Most people don’t get bonuses. It’s the norm. Unless you work for one of those big profitable tech companies.

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Jamie December 26, 2012 at 6:23 pm

It’s not just tech. I’m in mfg and I’ve been in both a structured bonus program as part of my comp package and year end discretionary.

I think it really depends on the industry.

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Another English Major December 26, 2012 at 7:18 pm

I work at a law firm and we get performance bonuses. I also interviewed for tutoring company and they offered bonuses for student attendance, which I thought was weird. I think it varies from company to company.

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Anonymous December 26, 2012 at 5:18 pm

I’m going to throw another voice into agreeing with the others here, this is likely about the merger and that the new company that was formed (or that engulfed or was engulfed) doesn’t do bonuses.

(And thank you gretta, I always feel a little bad about having never gotten a bonus despite doing phenomenal work because I work at the wrong kind of company. Glad to hear I’m not alone.)

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Anon December 26, 2012 at 6:01 pm

I am the reader who asked the question. Here’s a little more info on the merger/pay structure… the merger has nothing to do with not receiving a bonus.

We are a commission business but are paid through a “grid” system (we receive a % of our gross production after paying our service providers). I am the only assistant in my office, so other bonuses being paid, company protocol, etc, is a non-factor. We are a two man operation within a larger company. I guess you could compare us to a consulting firm or a “franchise” of sorts, as we work within a larger system, but control day to day operations. Our pay did not change at all through the merger, so no additional cuts to pay were made.

We were acquired by another, larger company, but they don’t control our business at all really. The technology and paperwork changed, that was all. The customers and how we run our office didn’t change. The bonus over the last two years came directly out of my bosses pocket, so the company has no control there… it was just a way for him to thank me I suppose. His pay is quite substantial, and because I assist on everything he does, I know what he is getting paid each month. Unless he is going through personal matters which he has not disclosed (we are pretty open about our personal lives and spend our lunch breaks chatting about everything from football to family), I am unaware of any personal financial matters that would prevent him from paying me a bonus.

I appreciate the feedback very much. Not sure if that will change now that the size of our operation has been revealed. Either way, I’ll be in tomorrow and Friday for a few hours planning out the first quarter of next year, so if he’s around and still hasn’t paid, I’ll ask after the new year. He has paid me before Christmas the last two years, explaining why I asked Alison this past weekend. I also felt a little down in addition to simply not receiving a bonus because I gave him a Christmas gift and he didn’t even get me a card to say thanks or happy holidays.

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Sarah G December 26, 2012 at 9:06 pm

OP – In your original email, you quoted your boss as saying, “You deserve a lot more and hopefully next year’s will be larger.”
This doesn’t sound like what someone would say if the bonus was coming directly out of his pocket. It wouldn’t make any sense in that context; it’d be like saying, “Hopefully next year I’m more generous and will give you the bonus you deserve,” which would be very odd.
Are you certain that the bonus wasn’t coming from the business, which is why he didn’t have control over the amount in previous years?

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BW December 26, 2012 at 10:43 pm

I find this odd as well. It’s more likely that he was allocated money with which to pay out a bonus. If it was out of his pocket, it could be he was getting a bonus himself and then giving a portion of it to you, but with the acquisition that bonus structure probably changed or the timing change or it is otherwise up in the air. I’m really curious now. Was your boss the former owner? That would have given him a lot more leeway to give you a bonus.

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Anon December 27, 2012 at 2:04 am

He was not allocated this money. I’m sure of it. I think most people are using a corporate frame of mind when responding without taking my word for it that we are a two man operation. I get a % from gross production as my compensation (not out of my bosses pocket), and he gets the rest after the other layers of the pay grid take their cut. He would have never received what I get paid, but since his book of business is profitable enough, he was able to negotiate getting an assistant at the same pay grid as some “producers” get without an assistant.

Your response almost seems skeptical. I have no reason to lie….getting advice for hypothetical situations is a waste of mine and Alison’s time. My boss gets his % of gross and that’s that, nothing more and nothing less. The same goes for me (except for the previous bonuses I received).

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Jamie December 27, 2012 at 7:08 am

This being money that comes out of his pocket personally, I would tread even more carefully by asking about it.

Sure, no one is owed a discretionary bonus from a company, but from personal money? That’s kind of like asking why you didn’t get a gift this year – although it’s not exactly like that.

You never know what other people have going on financially. In the last week in addition to tuition for my two eldest (which was planned) we had to unexpectedly buy a new furnace two days before Christmas and my husband’s SUV pooped the bed on Christmas Day and we found out yesterday the repair will be 3K. That’s almost 8 grand in less than a week on top of the pre-planned spending. Ugh.

Just illustrating the point that you never know what someone is trying to juggle financially – believe me I’m certainly glad I’m not in the position to have to give personal bonuses to people right now.

I will be honest though, I’ve never dealt with a pay structure even remotely like you’re describing – so I could be off base and perhaps it’s customary to do it this way…but I’d be careful about asking my boss why he didn’t reach into his own wallet again this year.

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Not So NewReader December 26, 2012 at 7:28 pm

He pays out of his own personal pocket?
Wow.
To me that changes everything. It could be personal matters going on with him. Or it could be that he was told not to pay bonuses out of pocket. Or it could be that he is getting a raise instead for you as a surprise.

But I do think that you are right to keep your eyes wide open at this point. The mergers I have seen have been an endless list of surprises for years after the merger. I hope you let us know what you find out.

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Katie the Fed December 26, 2012 at 8:20 pm

Maybe he got you a membership to the Jelly-of-the-Month club?

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jesicka309 December 26, 2012 at 8:37 pm

YES!

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Jamie December 26, 2012 at 8:42 pm

So not the same as a new pool…but you don’t need to increase our liability insurance for the jelly, so there is that. :)

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Kou December 26, 2012 at 11:23 pm

So I have an only tangentially related question. I just started working for a new org, a hospital. They’re finishing a new building that will open in January, and they send out an all-staff message saying the normal bonuses/party for the holidays will be when the building opens instead. My department gave out Christmas cards, though I have no idea who orchestrated it as I know the chief designed them and I saw both an admin and one of the surgeons handing them out/putting them in mail boxes. There was a $50 bill in the card.

I’ve never received something like this from an employer, so I’m not sure if I need to find out where it came from and say thank you, or just not say anything at all (no one else has mentioned it at all).

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