Thailand: Protests over bonus are 'temporary'

[webfact]

Protests over bonus are 'temporary'
Business Reporters
The Nation



Employers advised not to yield to pressure or they will set precedent

BANGKOK: -- News of employees demanding a rise in their bonus payments has returned this year, but a labour-relations expert with MR&TS, Supachai Manusphaibool, expects such protests to be a temporary event before the bonus-payment season.

He does not expect Thailand's labour situation to get worse in 2015, considering the economic and business outlook. Supachai had warned several months ago that employees at some firms would stage protests for high bonuses around the year-end just before their companies made an announcement, as a tactic to get more pay.

"But after December, things will return to normal," he said.

He advised employers not to yield to such pressure, otherwise they would set a precedent and their workers would expect compensation to increase every year, regardless of the business situation.

"Employers must fight [for lower bonuses], otherwise they will never be able to bring them down in the future," he said.

Many Thai and foreign firms have fixed bonuses. Some corporate conglomerates have different pay policies for each company within the group. Charoen Pokphand has a fixed two-month bonus, while its retail subsidiary CP All has a flexible bonus paid according to performance every quarter.

Pichpajee Saichuae, managing director of Towers Watson (Thailand), said bonuses paid by Thailand-based companies were forecast to be roughly the same last year, this year and next, while average salary increases would be 6 per cent this year and the employee turnover rate 13.3 per cent. To attract talent, companies still use base pay as the No 1 tool, followed by career growth opportunities.

A survey conducted by Hay Group, a global consulting firm, indicated the same trend. It said most companies currently used basic salaries as their primary basis for remuneration. However, a growing number of companies plan to change how they manage remuneration by emphasising benefits and other types of compensation.

Moreover, while most companies set their remuneration policy at P50 (the median of their defined market), there is an increasing trend towards remuneration policies between P50 and P75 because there is a lot of competition for talent currently.

According to the Hay Group's survey, the three sectors that will offer the highest bonus payments in 2015 are chemicals (4.03 months), followed by industrials (3.98 months) and construction and materials (3.69 months). The overall forecast of bonus payments in 2015 is slightly lower than for 2014 (from 3.44 months in 2014 to 3.40 months in 2015).

Thailand's top three industries that will make the highest salary increases for 2015 are the construction and materials sector (6.30 per cent), the oil and gas sector (6.28 per cent) and the chemicals sector (6.25 per cent). The overall forecast for salary increases in 2015 is slightly higher than for 2014 (from 6.01 per cent in 2014 to 6.06 per cent in 2015).

The report also shows that top three sectors with the highest basic salaries are oil and gas, fast-moving consumer goods, and chemicals.

According to a survey conducted by The Nation, most companies this year will pay the same bonus as last year, or lower. This in line with the economic situation, as gross domestic product is forecast to book almost flat growth. The property sector is one of the exceptions, with many companies expected to pay higher bonuses this year.

Sansiri president Srettha Thavisin said his company would pay higher bonuses to its staff this year because its net profit was better than in 2013. Last year, its bonuses averaged four months' salary, with some of its staff getting more than that because of better performance than their peers, while others got less. That performance-based policy will be followed again this year, he said.

Somkiat Makcayathorn, president of the Thai Rice Packers Association and managing director of Patum Rice Mill and Granary, said many rice traders this year would pay bonus of about one or two months' salary, the same as last year, as the economy had begun to recover. He said his own company would do the same, though in the past it had paid more than two months' bonus during strong economic growth.

Fixed bonus in banking sector

Many car companies are paying bonus of six to eight months' salary, while parts firms are paying between three and seven months.

The banking sector pays fixed bonuses with special incentives based on the performance of employees and return on assets (ROA). Siam Commercial Bank pays its bonus twice a year, in June and December, each fixed at one month's salary. A special incentive will be paid in February.

Bangkok Bank also pays fixed one-month bonus in June and December. A special incentive of around 1.5 months' salary will be paid by the end of January.

Krungsri Group paid a one-month bonus on December 25 and will pay a special incentive based on its Key Performance Index on March 25. Kasikornbank will pay a fixed two-month bonus in February, and incentives based on the bank's ROA will be paid in March.

It has not been a good year for advertising and media businesses because of slow spending due to political unrest during the first half along with weak purchasing power.

Sources have told The Nation that leading advertising agencies, newspapers, television stations were offering bonus lower than last year's, while some of them would maintain last year's rate.

In the newspaper business, Thai Post gives a one-month bonus. Post Publishing is expected to reward its employees with 50 per cent of their monthly salary, down from last year's 150 per cent. Daily News offers a three-month bonus, less than last year's. Matichon Group offers a 1.5-month bonus, compared with last year's two months.

A source at Bangkok Broadcas-ting and Television said it would pay bonus rates of about three to four months, similar to last year.

A source at IPG Mediabrands said bonuses would average about one to two months.

Source: http://www.nationmultimedia.com/business/Protests-over-bonus-are-temporary-30250944.html


-- The Nation 2014-12-30

[chooka]

Why do they feel the need to pay a bonus? Tell them to bugger off.

[Tatsujin]

Bonuses are "earned" I thought, rather than a "right" ... but what do I know ... same with salary increases, performance bonuses etc ... you do a good job, you get rewarded, if they expect things (over and above the basic salary) as a "right", there's no incentive to work hard or perform.

[kurnell]

The system of paying a bonus for nothing in Asia is ridiculous. Especially with half the population being lazy.

[Bluespunk]

Employers should pay workers bonuses that match the ones they pay themselves.

[ikke]

Employers should pay workers bonuses that match the ones they pay themselves.

I agree, so this year staff need to pay me....

[worgeordie]

I thought bonuses should be paid on results,profits,

employees effort,and if the company is healthy enough

to afford to pay bonuses.

To have guaranteed bonuses is not good,there is no

incentive for management,employees to perform to

the best of their ability,plus if the company does not

do too well one year,telling the workers it cannot pay

the expect fixed bonus,would cause a lot of dissatisfaction

within the company.

regards Worgeordie

[Kooweerup]

The system of paying a bonus for nothing in Asia is ridiculous. Especially with half the population being lazy.

We don't get bonuses in Australia, you go to work and get paid every two weeks for doing your job.

[gandalf12]

Only bonus I have ever had was keeping my job. Your salary is paid for you doing your job why would you get more because you did it?

I have had a bonus for completing a job ahead of time but fixed every year, no chance

Edited December 30, 2014 by gandalf12

[gandalf12]

Can I assume the "bonus's" would not apply to expat staff?

[northernboy]

Why do they feel the need to pay a bonus? Tell them to bugger off.

So I take it you do not have employees in Thailand.

Should hard working staff that have helped build your company over time, in a year that your profits might be down from years past, by no fault of their own, be told to "bugger off". If you do, you will find with that mindset you will have no good staff left to tell to "bugger off". They will find a better manger to work for.

Truly a short sighted mind set.

[GarryP]

Can I assume the "bonus's" would not apply to expat staff?

In the company I work for bonuses go to everyone, Thai or foreigner. But they are not fixed, varying depending on perceived performance. Not all companies pay at the year end. Some are tied to Chinese New Year and some are tied to the fiscal year of the company. Thus, many, like me, get nothing at the end of the year but pick up something at another time.

[robblok]

Why do they feel the need to pay a bonus? Tell them to bugger off.

Its quite normal to get a bonus at the end of the year in many countries. Especially if you don't work for the government but in the real world.

[DrTuner]

Strange system. First you pay them peanuts and then give a lump sum so they'll continue to work for small wages. Works, I suppose.

[chooka]

Why do they feel the need to pay a bonus? Tell them to bugger off.

Its quite normal to get a bonus at the end of the year in many countries. Especially if you don't work for the government but in the real world.

Not in Australia

[robblok]

Why do they feel the need to pay a bonus? Tell them to bugger off.

Its quite normal to get a bonus at the end of the year in many countries. Especially if you don't work for the government but in the real world.

Not in Australia

Seriously ?

Ok in the Netherlands there is often an end of year bonus depending on how well the company did. This is not always and for everyone but its quite normal. This is of course for companies and in general not for government workers (as it is often dependent on the profit generated by the company)

I expected this to be world wide especially as the Netherlands don't have much of a "bonus" culture like in the USA.

I stand corrected.. had expected Australia to be influenced by the US an UK and they are more known for their "bonus"culture.

[robblok]

Strange system. First you pay them peanuts and then give a lump sum so they'll continue to work for small wages. Works, I suppose.

It works in large parts of the world.. if the company does well often employees get some money too. Makes people work harder for the company. (though in general its depended on the world economic situation)

[AlexRRR]

Actualy chooka...and you should recall this...back in Bob Hawk's day when the party for the people introduced the "accord" profit share was meant to flow on to the everyday rank and file for becomeing more prodictive, trading off years of union earned benifits for a few extra $ a week, but it didnt eventuate and one of the good reasons the middle class in AU now find them selves with less cash to splash.

Since Thai's are low paid that one month's bonus is dam handy, its entrenched into there system and who cares if you dont get it posters, its fine by me.

[zaphod reborn]

I work with Prof. Supachai and just went through collective bargaining negotiations with my company's labor union. We decided not to change the bonus structure this year, and so it remains 1.8 months of salary. There is a tremendous cultural requirement in Thailand for a year-end bonus. Workers compare their bonuses and a larger bonus earns them greater status. The survey of companies cited in this article is not representative of the country's bonus structure. A more in-depth study would show the substantial differences of average bonus by industry. The automotive and financial industries tend to pay the largest bonuses, and the garment and electronics industries tend to pay smaller bonuses. There is a general shift away from guaranteed bonuses, and performance-based bonus systems are becoming more common. For my company, the union strongly resists anything performance-based. Dam#@ socialist unions!

[Strangebrew]

Sort of like the school system reward for showing up not for what you learned.

[Neurath]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Why do they feel the need to pay a bonus? Tell them to bugger off.

It's more of a delay in salary payment. This way (holding back salary until the end of the year) the employer can be better assured that the employee won't bugger off during the year. Mind you, January becomes a bit difficult - when employees do tend to bugger off.

[Bluespunk]

Can I assume the "bonus's" would not apply to expat staff?

Nope.

I get a two month bonus at the end of each two year contract.

[sambum]

Bonuses are "earned" I thought, rather than a "right" ... but what do I know ... same with salary increases, performance bonuses etc ... you do a good job, you get rewarded, if they expect things (over and above the basic salary) as a "right", there's no incentive to work hard or perform.

Did you hear/read about the bankers' bonuses paid out in the UK a while ago, resulting in major banks having to borrow money from the British Government in order to "stay afloat"? Massive bonuses paid out to people in spite of them making bad decisions, and losing the banks millions of pounds. If they were poor enough at their jobs, they were fired with literally hundreds of thousands of pounds paid to them in compensation. Now that's the kind of job to have!

Makes one think how much their bonuses would have been if they had made the right decisions!!!

[Mudcrab]

The system of paying a bonus for nothing in Asia is ridiculous. Especially with half the population being lazy.

We don't get bonuses in Australia, you go to work and get paid every two weeks for doing your job.

Depends on the industry, the persons position, effort put in and results achieved. There are some very sizeable bonuses paid in Oz for the right results.

[Vagabond1]

The system of paying a bonus for nothing in Asia is ridiculous. Especially with half the population being lazy.

How about bonuses paid to banking execs in the West while their institutions were crumbling? They were not lazy of course - very busy in fact lying to investors and regulatory bodies.

And how did you make the assessment of laziness? Any hard data? In contrast to many other countries, in Asia they do not rely on all kinds of social payments to last them through a few generations without having to work and earn a living.