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Kiwis Prefer a Pay Rise Over a Bonus

Kiwis Prefer a Pay Rise Over a Bonus

When it comes to remuneration, the majority of Kiwis choose certainty; with people favouring a smaller pay increase over the option of a potentially greater reward of a performance bonus. New data released today by SEEK, New Zealand’s leading online employment market place, reveals that 81 per cent of New Zealanders would prefer a guaranteed five per cent pay rise over the option of a 10 per cent performance bonus.

When this scenario is applied to the average annual salary advertised on, which is $74,965[1], this would result in an increase of $3,748.25 for the employee who chose the pay rise and $7,496.50 for the employee who achieved their performance bonus. That’s an extra $3,748.25 in the pocket for someone willing to back their own capabilities for an at risk reward.

However, there is a tipping point. It seems 10 per cent is not enough for working Kiwis to gamble the risk of losing out on a five per cent pay rise, but if the performance bonus is increased to 20 per cent, 49 per cent of people would take the bonus.

“With a continued trend of low wage growth in New Zealand, it is possible that the lure of a bonus may prove more attractive to job seekers going forward. The average annual salary grew by just 2.3% year on year to June 2015 in New Zealand,” said Janet Faulding, General Manager of SEEK New Zealand.

“Whilst salary increases and bonuses are important, employers should think beyond the tangible incentives that can be offered and consider the different motivators that work for different personalities. Personal development opportunities and team dynamics should also be a priority – getting the balance between these, cash incentives and perks right can result in high performing and happy employees”.

Just one in five Kiwis currently have a bonus available as part of their remuneration package, Of those that do have this inclusion, 76 per cent felt they were likely to receive this on the completion of the financial year. The average amount expected was $6606.80, before tax.

But as James Dalrymple, Director at specialist recruiter Robert Walters points out, Kiwi candidates are more focused on securing the best possible salary package when negotiating contracts for a new role, than ensuring performance bonus inclusion.

“With the exception of sales roles where bonus and commission payments are expected, we have not seen an increase in bonus expectations. The priority for the majority of professionals is securing the maximum fixed term remuneration package and benefits, which may include a combination of base salary and superannuation as well as benefits and tools-of-trade such as company vehicle, vehicle allowance, car parking, subsidies and insurance.”

But Janet Faulding advises this bonus conversation doesn’t need to be restricted to contract negotiations.

“The conversation around bonuses is also a good one to have with your boss at performance review time, even if your role typically isn’t included in a performance bonus structure. Aligning your performance to rewards is a positive conversation where both parties can easily identify the merits and the measures,” concludes Ms Faulding.

For those Kiwis that receive a bonus certainly aren’t frivolous when it comes to spending it. Twenty-four per cent are most likely to spend the money paying off credit cards, 23 per cent would invest the money or save it for the future and only 12 per cent choosing to spend it on a holiday.


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