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Opinion and Editorial

How does a $1,474 bonus sound? How about $286 million?

Vicky Kapur (From the Executive Editor's desk)
Filed on November 13, 2019 | Last updated on November 13, 2019 at 07.00 am
How does a $1,474 bonus sound? How about $286 million?

(AP file photo)

A bonus is a signal from the company to its staff that says that their efforts and contribution are acknowledged.

There's safety in numbers. In a rewarding gesture in these trying times, Chinese telecom giant Huawei will be paying a 2 billion 'special dedication award' to its employees - a sort of 'thank you' bonus for sticking with the company and helping it counter the 'extraordinary external challenges'. Huawei, of course, is caught in the trillion-dollar trade crossfire between the US and China but, as is obvious, it hasn't quit the race for digital supremacy despite being barred from the American market and supplies.

On the face of it, therefore, doubling the October salaries for all its employees and giving them a performance bonus may seem counter-intuitive and even counter-productive for its bottom line. But it's a well thought out strategy. You see, 2 billion yuan is $286 million and works out to an average $1,474 a head when divvied up between the 194,000 employees that Huawei has. That number ($1,474) may not seem hugely impressive anymore, but Huawei's purpose - of gratifying the staff and assuaging any concerns about its financial might - should have been achieved comfortably with the announcement making news globally. As corporate carrots go, bonuses aren't just a tool to reward employees for their performance after they've performed well - they're also meant as a fencing mechanism with which to retain potential top-performers and those critical to the functioning of a business.

The amount of bonus is only half the story - and the less important one on that. The undoubtedly more important half is that the bonus, irrespective of its size, is an overture that a company makes, a signal that it sends to its staff that says that their efforts and contribution are acknowledged. It makes the employees feel integral to the operations, they get a sense of belonging, they end up being more engaged and proud. For a company like Huawei which is set to earn at least $100 billion this year (yeah, what trade war impact?), spending $286 million on staff well-being isn't going to break the bank. Far from it. It's going to ensure that those responsible for its good fortunes - especially those with access to confidential data and patented knowledge - stay with it. There's safety in numbers, you see.

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