Amazon Is Eliminating Bonuses, Stock Awards to Help Pay for Raises (bloomberg.com) 152
Amazon is eliminating monthly bonuses and stock awards for warehouse workers and other hourly employees after the company pledged this week to raise pay to at least $15 an hour, Bloomberg reported Wednesday. From a report: Warehouse workers for the e-commerce giant in the U.S. were eligible in the past for monthly bonuses that could total hundreds of dollars per month as well as stock awards, said two people familiar with Amazon's pay policies. The company informed those employees Wednesday that it's eliminating both of those compensation categories to help pay for the raises, the people said. Amazon received plaudits when it announced Monday that the company would raise its minimum pay. The pay increase warded off criticism from politicians and activists, and put the company in a good position to recruit temporary workers for the important holiday shopping season.
The raises are worth more (Score:5, Informative)
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Re:The raises are worth more (Score:5, Insightful)
Bonuses don't work better for salaried employees - they work better for employees already making enough and can then treat it as an actual BONUS. Ya know, instead of something they need to pay for food or rent
This is a classic management trick (Score:4, Insightful)
I"m actually annoyed that, given how old
It usually works. Here's hoping it fails for a change. A guy like Bernie can keep it from happening, but we need a new Bernie. The one we have is pretty old
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they goal here is to get the two classes of workers (hourly and salaried) fighting among themselves and prevent them from Unionizing.
As a salaried employee represented by the same union at my work that also represents the hourly employees can I send you a "Huh?"
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Bonuses don't work better for salaried employees - they work better for employees already making enough
Bonuses in my experience mostly seem to be based on company goals being met. Here is what I'd prefer.
1. Pay me for the hours I work. Limit me to 40 if you want, but if I did the work and you authorized it, I want paid. No cheap exceptions or excuses. Want me to spend lunches in meetings and such? Sure, but I want paid. Take the yearly sick time, cut it in half if you want, then add it to the vacation time and call it paid time off if you want. Have it never expire. That is the key. A good employee
You want to know what you're going to be paid (Score:5, Insightful)
Re:You want to know what you're going to be paid (Score:5, Informative)
This kinda bothered me - I liked the people under me - so I went to higher management with kinda WTF, should we educate them better on their options for financial security (we were in a high risk contracting business).
Answer - nope, that way they can't quit so easily....(meaning, we own them now and don't have to treat them well anymore).
I quit...
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Err...well, it's called "welcome to the real world", where you need to learn to live and act like and adult, and live
Re:You want to know what you're going to be paid (Score:4, Insightful)
I agree. And a great way people learn most things is in school or with classes. I mean, no one said to you "welcome to the real world, there's physics, figure it out".
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Otoh, inconsistent income forces workers to very expensive and barely legal payday loans. Not only is that worse, but they can't avoid it even if they know it's a bad idea. Unlike the loans you are worried about.
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When I had little money I just lived like a monk in a monastery. Great motivation to fix that issue - it's not like most people should consider low level employ at a place like Amazon to be a real car
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That only works if your base pay is actually enough to live within. Otherwise, you're stuck depending on bonuses to live, and suffering payday loans when the bonus doesn't come. It's better to do away with the bonuses (that is, money your employer pays you if/when he feels like it) and have a consistent income that makes ends meet.
I'm betting you haven't asked your employer to flip a coin to decide if you get paid this month or not.
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Otherwise, historically, "suckers never get an even break", isn't peculiar to the US...and stretches bac
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People feeling entitled is a problem. For example, people feeling entitled to pay people less than it costs to live and expecting the rest of society to keep their "worker units" running for them. Why should they feel entitled to all that labor for less than the cost to produce it?
I suppose next they'll want to only pay 80% of the power bill and have the taxpayers kick in the other 20%.
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Nothing compared to pay day loan companies that "help" people avoid homelessness with friendly, 6,000% loans. Your confirmation bias and anecdote of some kid splurging with his first real paycheck after living on Ramen for four years aside.
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Yes, they can go deeper into debt slavery that way - constant income is a loan magnet
No, idiocy is a loan magnet leading to debt slavery.
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What kind of incentive is there to be a "good" employee when you're being paid $15 an hour? Perhaps if you live in the middle of nowhere that has a cost of living that's extremely low, that might prove to be an incentive. But, in virtually any city that's basically a starvation wage that gets you at most somebody coming in punching the clock for 8 hours and probably not anymore than the bare minimum to avoid being fired while they look for work elsewhere.
This shouldn't be an either or situation, Amazon make
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as opposed to a flat increase in base salary.
I prefer increased salary. ...
I can invest it in places different than my employer (options) and diversify my portfolio.
I can even invest it in me (training, new qualifications not useful only in current job) or place in savings
Because i trust employer as far as I can throw company Board.
Promises can be changed next week. and company cannot go back on what they already paid me.
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Well, if you are salaried, you by definition don't work hourly....minimum wage only apples to hourly workers.
It sounded like this was only the bonuses and all for warehouse hourly workers...they are hourly, so they all are at min. wage of $15/hr, but no more bonuses.
If that isn't the case, then, they are then also robbing incentive money from salaried folks to pay for raises to $15/hr for the hourly folks, which indeed would suck for the
Re:The raises are worth more (Score:5, Informative)
I'm not sure how Amazon does their bonuses, but for many salaried positions I've been at, a bonus is a tantalizing carrot that appears much larger than when it's finally in your hands - if it gets there at all. The company can have a "bad quarter" or "bad year" and suspend them, they can allocate a certain amount per group and the the manager divvies it up according to their whims instead of using metrics, etc.
At this point in my career any time a manager talks about a bonus, I'll believe it exists when I see it land in my bank account, not before. So others in the company below me pay-wise getting a raise and eliminating some fairy tale bonus that probably wouldn't materialize to cover that? Sounds fine to me.
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Amazon's strength is the ability to operate at a loss long enough to drive everybody else out of business while forcing the government to subsidize its employees.
The logistics is a close 3rd though.
Automation is going to change the balance of power (Score:3)
pay raises are more desirable than bonuses since they are cumulative. But of course, total compensation is total compensation and bonuses allow more merit recognition at the cost of lowering the retention aspects of higher salaries.
Since amazon is going to more and more automation it may turn out that those higher paying jobs will be gone in a few years making this non-cumulative and just the same as a bonus from amaazons point of view. The higher they can raise the wages of their non-automated competitio
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Also it is less prone to favouritism and misuse of power.
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Anything labeled as a "bonus" is also taxed at a much higher rate.
The average employee will come out much better this way.
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Anything labeled as a "bonus" is also taxed at a much higher rate.
There is no "bonus" tax; bonuses are subject to the same income tax as all other earned income,
even the Social Security + Medicare taxes are the same (Unless the bonus just happens to be the payment that
pushes an employee above the maximum tax base for SS that year).
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Bonuses do mess up the tax withholding rates though which typically results in more taxes being withheld than should be. This is resolved at tax filing and typically translates into less of an outstanding tax burden, (or a higher refund if you get one of those.)
Bonus tax (Score:2)
Did you bother reading the material at the link you quoted? Here are the highlights:
1). As such, bonuses (like other supplemental wages) are treated differently than ordinary wage or salary income when it comes to taxes *withheld at payout*.
2). Remember, taxes may be withheld from your bonus at a higher tax rate at payout, but when you file your taxes at tax time your actual tax rate is based on your total taxable income and overall actual tax rate, which may be lower.
In other works, withholding might be b
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Bonuses aka intermittent rewards are a stronger motivator than a constant reward e.g. salary/wages, which is probably why they were utilized. That doesn't mean people won't prefer a constant reward instead, though.
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Surveys showed that current employees would prefer more predictable pay to the bonuses.
(I don't know how their bonuses work, so if they are rare and hard to achieve (and the same to the stocks) I was unaware when making this post) To be fair.... I worked in a warehouse for a year or so. Many employees there were angry / insulted at being offered life insurance and 401k's. They would give a response of basically: "What the HELL would I want my money going to anything else for? It's MINE I want it now. How else am I gonna go get crunk every Friday after this place?" A guy with 3 kids was aski
Isn't this what people wanted? (Score:3, Funny)
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Re:Isn't this what people wanted? (Score:4, Informative)
Whoosh...
The "I make $50K/year in Silicon Valley" thing is a Slashdot in-joke
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Oblig.
In Soviet Russia, whoosh gets you!
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Jezuz, I make more than that living in a mid-sized city on the east coast when a generally considered low-cost of living.
Re:Isn't this what people wanted? (Score:5, Funny)
Your employer is literally paying you peanuts.
May 2018 price for Groundnuts (peanuts) is $1,420/metric ton. 35 metric tons of nuts is fucking nuts.
How would an employer even ship and store that many nuts for their employees. It would be the literally worst business decision.
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If there's anyone in the world that could ship and store that many nuts, it would be Amazon. When you get paid your peanuts, it's with "free" 2-day shipping!
You had just better have a large food-grade silo at home to hold them all in. A cubic foot of peanuts weighs somewhere between 16 and 19 pounds, so 35 metric tons of peanuts would take up about 4500 cubic feet. Personally, I can't afford to buy a stainless steel silo that big when I'm paid peanuts!
Yes, I'm mixing metric and imperial units, get over it
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Yep, here's this months pay, a 120 kilo block of salt. (based on quick google searches of roman pay)
Now you gotta haul this heavy damn block to the local market, find someone who is buying salt,(because probably the local tailor is not acce
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Luckily for Roman soldiers the whole paying in salt thing was very likely a back-formation invented by Pliny from assumptions on the meaning of the word salaries. And the section of his book where he mentioned this was more about facts relating to salt than about soldiers or economics. In Pliny's time soldiers were paid in coin, and have been since around 100-150 years before Pliny's time (Marian reforms).
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It appears that the whole notion of Roman soldiers being paid in salt (or salt equivalent) is a fairly recent invention and there don't appear to be any contemporary sources that back it up. It's just a myth, so don't try to reason it out too much. (source) [blogspot.com]
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He/she means literally figuratively, not literally. Obviously.
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That isn't what the article says. A bonus is different then a normal raise in salary, also stock awards to low end employees are rarely that useful, here is a few thousand dollars of stock, you can cash it in, but you probably shouldn't because it will be worth more in the future.
Normally I prefer a higher salary then hoping for a Bonus. With Bonuses I am hoping for the Good will of the company. Vs the Company putting in a long term investment in me.
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Normally I prefer a higher salary then hoping for a Bonus.
Me too - 100%. First the higher salary, then the bonus.
"than"?
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Eh, you should almost always cash in stock. Having your savings and your income from the same company is a huge risk- in a downturn you lose your savings and income at the same time. Better to be invested anywhere else. Besides, if you want shares of FOO you can buy them on the open market. The only time this isn't true is preIPO.
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Re:Isn't this what people wanted? (Score:5, Insightful)
Everyone gets paid the same regardless of productivity? This should be good news for those advocating the $15/hr minimum wage.
Yep. Defining "productivity" is at the whim of the employer, and "paying for productivity" is a well-proven strategy for lowering wages.
In most businesses, the things that reduce productivity are screw-ups by management, not by the people actually doing the work.
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In most businesses, the things that reduce productivity are screw-ups by management, not by the people actually doing the work.
Oh please, I've been in many situations where it's very clear that it's the "doer" at the lowest level that is lazy and/or incompetent, both in software development and elsewhere. Unless you use the cop-out that having crap people on staff is ultimately a management failure there are some pretty terrible employees out there. I'm working with one right now, he's a real life Wally. If he's got two projects he's always super busy on the other one. Like he says the exact opposite to different projects in separa
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And paying your horrible employee merely less doesn't get him out of the way. He should be fired. Heck, being able to "pay him less" actually makes it more likely he'll stick around longer.
The signature of incompetence in management (Score:2)
In most businesses, the things that reduce productivity are screw-ups by management, not by the people actually doing the work.
Oh please, I've been in many situations where it's very clear that it's the "doer" at the lowest level that is lazy and/or incompetent, both in software development and elsewhere
It is an amazing thing, but incompetent managers who screw up always put the blame on the people who work for them. Funny, they never admit they screwed up.
The phrase "the people who work for me were lazy and/or incompetent" is pretty much the signature of an incompetent manager.
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You're conflating employment with revenue. Sure, the Fortune 500 may only employ 17.5% of the workforce, but what portion of GDP are they? Fortune says they're responsible for 2/3 of the US GDP, which is what they're primarily taxed on (revenue taxes, as opposed to payroll taxes).
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It's actually a minimum wage, so employees can receive wage raises for merit if Amazon so chooses.
The median wage tends to follow the minimum wage [twimg.com] as a proportion of productivity, which means a minimum wage not kept up with productivity gains just gets you a larger, less-wealthy work force instead of making the workers wealthier. Had the minimum wage stayed at 1960s levels, the United States would likely have around 270 million population today, and a median household income of $115,000--the dollar numbe
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Everyone gets paid the same regardless of productivity?
No, people still have different salaries. They're just eliminating their individual performance bonuses.
In business there are times when things that are often a good idea might not be a good idea right now. For example, well-run performance bonus programs are generally effective, but if you've been running one which is widely perceived as arbitrary and unfair it might be better to call it off for a while rather fix it. Until people trust the umpires they aren't going to sacrifice to win the game.
Also, bo
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Amazon already fires unproductive people. And "unproductive" includes things like taking bathroom or lunch breaks.
But, why would it be bad if all warehouse workers were paid the same regardless of productivity?
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They're Amazon warehouse workers, Amazon already has them working as hard as possible (or fired) without time for a piss break. How are they going to be more productive? The bonuses were probably based on how the whole shift or warehouse performed rather then how individuals performed unless it was who could go the longest without a piss or collapsing in the warehouse without air conditioning.
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I don't agree.
A declining population would spell disaster for the US economy. Our birthrate leaves us 750,000 new people per year short of a stable population, much less a healthy rate of increase. This means immigration is vital to our economic survival.
If immigration is vital, the one thing that I request as a lower middle-class American is that those immigrants not be coming in to take my position or positions above me. The kind of merit-based immigration that is being discussed now would do exactly that
Very reasonable increase (Score:1)
In other news, Bmazon workers now must meet minimum quotas every three minutes to receive their quota of air.
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https://www.seattletimes.com/b... [seattletimes.com]
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Mmmm [youtube.com]. Clearly I'll have to upgrade my utopian-vision generator; reality has overtaken the version I have...
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Holier Than Thou (Score:1)
I mean did anyone really think they were going to pay for it from their profit margins?
Amazon is robbing Paul to pay Paul (Score:2)
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Otherwise known as Three-Card Monte.
I suppose the government could retaliate to this transparent PR scam of Amazon's by creating its own dog's breakfast of ever shifting taxation rules and benefit programs, designed to gain approval (buy votes) while leaving everyone confused as to whether they are actually any better off.
But that would be crazy!
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Someday soon, someone is going to make a killing selling Guillotines!
I see what you did there.
too bad (Score:2)
too bad they will not end bonuses to management. In the end, I guess it is better to get a more consistent and higher paycheck than relying on bonuses you may or may not get.
LMAO! Suckers! (Score:2)
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It's a much different world than what it was back in the 1970's. A person in the US can't live off minimum wage working 40 hours, especially in the larger cities. What good is saving a stock until your retirement when if you're lucky you can pay to have a roof over your head but you're stuck deciding between the electricity bill and food. It may not be exactly that combination but many people today are having to make a similar choice because minimum wage hasn't kept up with inflation. People need a living w
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Squat back in the 70's is more than squat today.
You think most Amazon warehouse employees are 18-25??? Most pickers are, but those are being automated and there aren't that many of them. Packers, etc. tend to be fairly old (say, 40's+)
Good move. Bonuses are taxed more (Score:2)
Bonuses are usually taxed at 30% (at least mine were when I worked in private sector). It's better to get that money as regular salary and pay a lower tax rate on it.
Re:Good move. Bonuses are taxed more (Score:4, Informative)
You are an idiot. You must think your annual refund is "free money" too? Higher taxes get withheld from large checks such as one that includes a bonus, as each one calculated as if all checks were of that size. However you are taxed on your overall income for the year, so any over-payment or underpayment comes back to you come tax time.
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No. Your employer withheld at 30% because it was easy math for their payroll department at bonus time and likely to be an overpayment, rather than an underpayment. It is taxed at exactly the same rate as the rest of your income, based on your tax bracket (as determined by annual income).
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Yes, people making 20k a year are always worried about minimizing their tax burden. That occupies a lot of their thought.
They're what? Oh I see... (Score:2)
For a moment there I thought that they were eliminating executive stocks and bonuses to pay for this.
Silly me, how could I possibly imagine that happening!
Strange how . . . (Score:2)
Many will be raised to above $15 minimum (Score:3)
I was talking to an Amazon employee today who said it appears that they are definitely performing a compression of lower range employee salaries to implement this minimum - as I would expect.
What this means is that their lowest paid workers will be raised to $15 / hour. Others paid more than that will likely be raised to higher than that. So, for example, someone making $10 / hour might go to $15 and someone making $13 / hour might go to $17.
The employee had no idea how high the salary compression would go, but presumably, there is a stopping point. Perhaps someone at $25 / hour will still get $25 / hour and everyone under some ceiling of the compression range will get something depending on how close they are to that ceiling.
This makes sense because positions that make more should still make more, and it avoids throwing away rewards given for performance and experience.
The employee I spoke to was making closer to $20 / hour and is expecting that this will result in a raise.
Could be competitor killing for holiday season (Score:2)
Given the current environment, there is a very good strategic reason to do this now other than the publicity advantages.
We are at or very close to full employment. Many retail businesses near me are already having much greater difficulty finding employees and turnover is climbing. The holiday season is approaching. There will be a severe crunch this holiday season to staff seasonal employees.
Amazon has just made a very aggressive grab for those seasonal employees. Other retail businesses already in deep tro
Nice. (Score:2)
No, seriously. We are all sceptical of the large scale disruption Amazon is bringing about and yet we all enjoy it. Nice to hear that Bezos isn't all Manchester capitalism about it. I figure he thought I'd I'm going to start large scale philanthropy with my obscene amounts of money, might as well start with some basics for my workers.
Nice. Well done.
Bonuses come and go anyway (Score:2)
I'd rather have a higher base salary and less bonuses, than lower base salary and higher bonuses. That's because bonuses are never guaranteed.
This seems like a win for Amazon employees.
LOL More failure of the Left! (Score:2)
When will leftists learn that trying to raise the minimum wages doesn't work?
Could be worse (Score:2)
What was once Hewlett-Packard eliminated bonuses, profit sharing and stock options to give no raises.
We didn't see that in the news.
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He likely doesn't have the liquidity to do so. His salary was about $80k in 2017. His money isn't real until he cashes it in and why should he do so to pay peoples salary?
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I mean, yes, his base salary was $80k, but made $1.6m in "other" compensation: https://www1.salary.com/Jeffre... [salary.com]
Problem is, it doesn't go into what the "other" is. It's not bonuses, stock, or stock options.
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I wouldn't mind this. Most places I have been the stock price is essentially flat, with small blips at the most. The RSUs being given out instead of bonuses is a bit of a pain - I have to wait for them to vest, and if I leave the company I don't get all of them. Whereas the cash bonus means I have cash to do whatever I want with.
Often the goal here is to incentivize the worker to do a good job so that the stock goes up. But workers don't have this ability as most of a stock's price has nothing whatsoever
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