Hamish Fletcher: Staff bonuses are a cheap trick

TVNZ boss Kevin Kenrick. Photo / supplied

COMMENT:

It may only be August, but many chief executives are getting to play Santa Claus as they dish out cash bonuses to staff.

TVNZ is the latest to unveil a $1000 one-off treat for all its employees who don't have incentive-based pay.

"TVNZ has had a great year and this payment is to recognise the efforts of all our people who have contributed to the improved business performance," chief executive Kevin Kenrick said today when announcing a $5.1 million profit for the year to June 30.

"We don't expect to repeat this level of profit growth in future years, but it has created a one-off opportunity for us to thank our people for their contribution and commitment to TVNZ's success."

TVNZ's lolly scramble follows Air NZ gifting its staff bonuses of $1800 after posting pre-tax earnings of $540m on Thursday, the second highest profit in the airline's history.

Mainfreight, too, recorded a profit of $107.8m in the year to March and said that allowed it to pay its largest-ever round of discretionary bonuses, at a total cost of $20.7m.

Few people, this columnist included, would turn up their nose at a lump of cash.

It's worth pointing out, though, that bonuses aren't just an altruistic divvying up of the spoils.

They're also a clever instrument for keeping workers happy and engaged in their jobs without blowing out the annual wage bill.

Unlike pay rises - which are carried over into following years - bonuses are discretionary.

When times are tough and profits take a hit, bosses can forgo paying these incentives without too much fuss from staff.

Do the same with the monthly payroll, and workers down tools at best, and turn mutinous at worst.

Mainfreight recorded a profit of $107.8m in the year to March. Photo / NZME

TVNZ's wage bill isn't broken out in today's annual result.

Air NZ's labour costs, in the year to June, went from $1.26 billion to $1.29b - a rise of 2.62 per cent.

Over the same period, the number of Air NZ employees grew by 1.69 per cent to 11,074.

Mainfreight's labour costs in the 12 months to March went up 13.1 per cent to $538.5m.

At the same time its team grew by 7.5 per cent to 7352.

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