Harare – Only one out of every five – or 22% – of businesses in Zimbabwe will not be paying annual bonuses in 2017, a new survey has shown.
According to a study conducted by Industrial Psychology Consultants (IPC) released on Monday, at least 50% of participating organisations do anticipate paying their workers bonuses this year.
“The remaining 28% is uncertain as to whether or not they will pay a bonus,” the survey showed. “Most of the participants (68%) who are forecasting to pay bonuses this year said that the bonus will be a guaranteed cheque.
“This suggests that, overall, bonuses this year will be paid not because the company has performed, rather because the bonus is contractual (guaranteed).”
According to IPC, the current bonus system, where companies pay bonuses because they are contractual, is likely to continue to put more pressure on companies to reduce costs, as the majority of them are already highly leveraged.
“Bonuses, especially those with no relationship to performance are a luxury in the current environment. Companies who are continuing this practice are putting themselves in real danger. Employers and employees need to have candid discussions around this issue,” states the survey’s authors.
‘We urge businesses to adopt self-funding incentive schemes in place of guaranteed bonuses currently being paid on the market.”
Meanwhile, just over half of companies in Zimbabwe are not planning to increase salaries in 2018.
One in five companies said they had retrenched employees in 2017.
On a more positive note, a large percent of the participants (82%) told the survey’s authors they believe their companies are performing well but can do better.
Only 12% believe that their companies are struggling to remain viable, while 6% said they believe they are “performing extremely well”.