For the majority of our survey respondents, there was no bonus in 1999, and 2000 was probably no better.
"Large companies no longer pay bonuses," confirms Janette Cumming, a director of Paracon Holdings. "Some are even offering basic packages, and that`s it. The bigger ones will have benefits - medical aid, provident fund - but no bonus."
This trend is strongly reflected in our findings, as 68% of the sample said they didn`t get a bonus the previous year.
Cumming notes there has been a switch to a non-guaranteed incentive, based on the company`s profit. "If the company doesn`t make it, they don`t have to pay anything out. And if they make it - well, then the people deserve to get something."
The survey shows that when a bonus was given, it was for personal, project or departmental performance, while the size of the bonus ranged from one monthly to four monthly salaries.
Mark Bussin, a partner at remuneration consultancy 21st Century Business and Pay Solutions, confirms the no-bonus trend, saying that demand for consulting services concerning the development of retention bonuses - very high a few years ago - has died down.
He explains why it`s difficult to design bonus schemes for IT staff. "IT folk are generally support staff to operations. They are linked to group profit and this separates them from operations - they are in the same boat as finance and HR, where typically you can earn between one month`s salary - or 8.33% of your annual salary - to around 20%, whereas operations or line folk can earn 50% to 60% of their salary.
The most common fringe benefits are medical aid and pension or provident fund, although less then half the respondents had them. A cellphone allowance is the third most popular benefit, followed by a car allowance, while much fewer people enjoy an entertainment allowance, and still fewer a housing allowance.
Retention strategies
Yet bonuses and incentives can be that decisive factor in keeping or losing staff.
Bussin explains the compensation model as consisting of four elements: cash, fringe benefits, bonus or incentive schemes, and share options.
He says the most common staff retention strategies are based on bonuses, "which measure things like cost, on time and user acceptance" or on giving staff shares in the business. "Share option schemes that are rolled out to everyone, or only to key players, have a huge retention factor."
Bussin says many companies offer non-financial rewards as part of designing more favourable employment practices, achieving tax benefits with perks such as dinners, trips or gifts.
Andre Besselar, head of Innovative HR Strategies, says the trend in the US is to offer a smorgasbord of benefits and services designed to make employees` lives more manageable, including perks such as dry cleaning services, child care alternatives, family- and pet-friendly programmes and even health interventions such as massages and alternative lifestyle counselling.
As this survey didn`t include any such queries, we don`t know if the hardest working South African IT professionals are pampered by such innovative perks.
"Higher salaries alone will not necessarily retain good staff and some companies are now following international trends, offering innovative and creative benefits and incentives to retain staff," says Andries van Wyngaard, MD of Prodyn Resource Consulting.
"Companies will have to remain competitive in terms of remuneration, benefits and working environment, but also need to offer staff an environment where they can remain at the forefront of the technological developments in the industry."
Contractors and freelancers trade off benefits for cash, making between 24 to 30% more than permanent staff.
Specialists say incentives will continue to be based on performance. Says Jill Hamlyn, head of the People Business, "As an entrepreneur and a business owner, I would never pay a guaranteed bonus. It`s such a de-motivator because it`s sending out completely the wrong message because you are awarding everyone, not your best performers."
She says the outcomes-based incentives are a sign of the maturing of the market. "Anybody who is complaining about not receiving a bonus doesn`t belong to the age we are living in. They obviously have the old "employee" mentality, not a "career" mentality where trying to make the most of themselves".
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