| 13.8°C Belfast

Third of UK finance workers believe company bonus payouts are 'undeserved'


Finance workers resent big bonuses

Finance workers resent big bonuses

Finance workers resent big bonuses

Bosses pocketing bumper payouts would be wise to keep schtum or risk ratcheting up staff resentment over workplace bonuses.

United Arab Emirates has emerged as the only nation more bitter than Britain when it comes to the way workers felt about businesses dishing out hefty financial awards , a study has revealed.

More than a third of UK finance professionals working at a company with a bonus scheme believe the payouts as "undeserved", according to the Chartered Institute of Management Accountants (CIMA).

The global poll of 6,500 financial decision-makers found that 62% of UK professionals felt unjustified bonuses fuelled resentment among colleagues, with the level reaching 97% among workers in the North East.

The CIMA said the findings suggest Britain's bonus culture was in urgent need of a re-think.

Tony Manwaring, CIMA's executive vice-president - external affairs, said bonuses were a trust issue as much as a financial issue.

"If customers and stakeholders perceive a company to be paying exorbitant sums to its employees, it will effect that company's reputation and erode the trust in which they are held. This is something we saw time and again following the financial crisis.

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

"So, boards need to think carefully about their bonus structure and this applies to all levels within the business. Current schemes often only focus on 'hard indicators' such as short-term revenue, but they should also seek to reward evidence the employee is helping the organisation plan and build for the long term."

The report said that 41% of professionals in the East of England and 40% in Scotland felt bonuses were unjustified, while workers in the South East and the East Midlands were more likely to agree that top-earners deserved rewards.

Wim A Van der Stede, CIMA's professor of accounting and financial management, said workers' perception of "unjustified bonuses" was triggering resentment and undermining employee engagement and motivation.

"Designing effective incentive systems is hard, yet incentives that may be fair may not look fair - a challenge that touches on the issue of transparency as well as the question of both how and how much to incentivise."

The findings come following a round of shareholder revolts at annual general meetings (AGM) this year, as scores of investors took umbrage with the remuneration awards rolled out to top bosses. Blue-chip giants Anglo American and BP faced investor protest at their AGMs. Shareholders voted to reject BP's remuneration report for the last year, which included a pay deal of 19.6 million dollars (£13.8 million) for chief executive Bob Dudley.