Susan Gordon, Business Reporter

Left: James Moss-Solomon, director of corporate affairs, GraceKennedy Limited, said companies basically godfathered employees under the system of bonuses that was without link to performance.   Right: Jacqueline Coke-Lloyd, executive director of the Jamaica Employers Feder-ation, says traditional bonuses ranked among the worst decisions in corporate history. - File

A small number of com-panies, one in 10 of those polled by Wednesday Business, say the bonuses they're paying this Christmas have no link to profit performance nor productivity, but the majority have nixed the traditional boost to pay packages in favour of incentives.

Those companies say employees who get on the list must prove themselves through improved work performance, and some companies say that performance has to be reflected in profits before any employee reward is figured within expenses.

So, while households are gearing up to spend, corporate bosses are holding tight to the purse strings in a year when profits have fallen, forcing several companies into huddles on devising new income streams.

Waning fast

The traditional bonus is not yet dead, but it is waning fast.

"Those days are gone," said Jacqueline Coke-Lloyd, executive director of the Jamaica Employers Federation (JEF).

Traditionally, Jamaican bonuses have been linked to individual's salary, and was either equivalent to or calculated as a portion of pay.

The payouts were generally equivalent to between one and eight weeks of pay, and often bore no relation to the employee's produc-tivity, nor were they based on profit-sharing.

Performance-based

But 'performance-based incentives' are now more the norm, eclipsing bonus packages.

Just about half the 20 companies polled by Wednesday Business this week said their bonuses were performance-based, with a few stating that payments were made way ahead of Christmas.

A quarter of the companies, including the now profitable National Commercial Bank, which pays over eight weeks of salary, said Christmas bonuses paid to employees was from company profits. NCB made a net profit of $5.5 billion at its year-end to September 2006, 23 per cent above 2005.

Only two of the 20 companies said they pay no Christmas bonuses.

Employees tend to frown on their bosses when there are no bonuses to fatten pay envelops, but the decision is solely that of management. In some cases, unions exert influence on that decision.

Labour agreement

"There's nothing in the Jamaican labour laws which says bonuses ought to be paid," said Lelieth Hamilton, director of labour laws at the Ministry of Labour and Social Security. "It's either a bargaining agreement or a management decision."

Coke-Lloyd said if companies made agreements with their unions on bonus payments then welshed on the agreement, employees then have the right to lobby for it.

She told Wednesday Business that the outgoing practice of paying out bonuses not tied to performance was "the worst thing ever done."

"Many watched their peers do nothing all year and still walk away with the same two-week or three-week pay - that was unfair," said the JEF executive director.

Added Collin Barnett, president of the Human Resource Management Association of Jamaica: "It's a disincentive where everyone benefits the same and is not contributing."

Coke-Lloyd said a JEF survey has shown that in the last three to five years that over 50 per cent of organisations were moving towards incentive based payments, a figure reflective of Wednesday Business' informal poll.

The Gleaner Company is one such company which shifted from the traditional bonus to a performance based scheme that took effect last December.

"People are becoming more professional," said James Moss-Solomon, president of the Caribbean Association of Industry and Commerce (CAIC) and Chief Corporate Affairs Officer at GraceKennedy Limited, attesting to the growing trend.

"Not because you are preferred," he said, "but it's a more professional way of doing things and it's less controversial."

GraceKennedy's bonuses are performance based.

Still, a few employers remain who believe in giving with no strings attached to their employees during the season.

"We pay an end-of-year bonus. It's something our employees look forward to, so we pay it," said Richard Chen, director of the SuperPlus Food Store chain.

At Life of Jamaica, chief financial officer Ivan Carter said LOJ's Christmas bonus was free from measurement against employee's performance or company's profit.

"Yes, it's consistent with the practice in recent years where we pay close to one month's salary," Carter said.

Interestingly, Pegasus Hotels of Jamaica, operator of the Jamaica Pegasus hotel, which has a profit-share arrangement with employees under which disbursements occur annually in April, said it paid out at Christmas monies to employees for unused sick leave.

Moss-Solomon said performance based bonus' was a positive trend, eclipsing the 'godfathering' of employees that had developed.

"Bonus at the discretion of your boss eliminates the master slave mentality," said the GraceKennedy executive.

Pointing out that most developed countries do not have the old sense of a Jamaican Christmas bonus, Coke-LLoyd said many employees are finding the performance based system more efficient.

"You don't have to sit and wait and wonder," she said.

- susan.gordon@gleanerjm.com

1. Super Plus	Traditional
2. LOJ	Traditional
3. NCB	Profit-sharing
4. Pan Caribbean	Profit-sharing
5. Wray & Nephew	Profit-sharing
6. Courts	Profit-sharing
7. Carib Cement	Profit-sharing
	(economic value)
8. BNS	Performance-based
9. Red Stripe	Performance--based
10. APM Terminals	Performance-based
11. C&W Jamaica	Performance-based
12. The Gleaner Co.	Performance-based
13. JPS	Performance-based
14. Boss Furniture	Performance-based
15. C.O.K.	Performance-based
16. GraceKennedy	Performance-based
17. Dicigel Jamaica	Performance-based
18. Pegasus	Payment for sick leave
19. Jamaica National	None
20. NHT	None