RE: Bonus instead of raise -- why?

Subject: RE: Bonus instead of raise -- why?
From: "Domaschuk, Rob" <Robd -at- datalogics -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 1 Oct 2001 14:49:54 -0500

My first guess is that it will save the company from compounding salaries.

Let's say your salary is $100,000 (hahahahahaha, but hey it's just an

With a 5% raise, you now get $105,000. Next year they give you another 5%
raise, which is 5% on $105,000, not $100,000. The following year 5% is on
$110,250. After three it's $115,763.00. So after three years they have paid
an additional $31,013 ($5000 + $10,250 + 15,763)

If, on the other hand, the give you a 5% "bonus" then the don't raise your
actual salary, and after three years they've only paid you an extra $15,000.
That's a lot of money for a company to save. The benefit to the employee is
that a $50.00 per paycheck increase doesn't really do anything, but an
single check worth $5000 is pretty good, and you can justify it to yourself
as "an added paycheck".

That's my guess.

Rob Domaschuk
Technical Writer, Datalogics inc.
312.853.8337 - t
810.958.2937 - f

"I hear it in the deep heart's core."
- W.B. Yeats, The Lake Isle of Innisfree

-----Original Message-----
From: anonfwd -at- raycomm -dot- com [mailto:anonfwd -at- raycomm -dot- com]
Subject: FWD: Bonus instead of raise -- why?

raises will be handled differently this year.
Instead of getting, say, a 5% raise, we will get the 5% in one lump sum
with the first pay period at which the raise would have been effective.

Any input is appreciated. Thanks!


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