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Comment by BossingAround | Hacker News Reader

> You're cutting the salaries of your employees

They were allegedly cutting their bonuses, not salaries. That's a pretty significant difference if you ask me.

I'm using the term loosely to describe total compensation.

I understand; counting bonuses as a regular part of your compensation is dangerous though. While it is a part of your compensation, the employer is fully within their right to reduce or raise this part as much as they see fit.

Getting angry because of this is rather strange. That's precisely what you sign up for with bonuses: "This part is variable and may go up or down."

Yes, I see your point; slashing base salary is different than not paying a bonus or significantly reducing it. However, the net effect is still the same: employees take home less money, and their estimation of how much they can "expect" to get is thrown off. The change here is actually more insidious, because it takes advantage of the fact that employees don't actually know what the "average" bonus is, so by tweaking it a few percent is unlikely to be noticed by any individual employee.

Even when the bonus formula is well-known and fairly standardized, to the degree that is consistently paid out over a long period, people start thinking of it as effectively part of their salary. If it goes away or is significantly reduced because of company performance or whatever, it's taking away money people were (even if somewhat irrationally) putting in the sure thing bucket.

It is dangerous, but it is also fairly common if the bonuses are all but guaranteed and make up a significant part of the total compensation.

It is not uncommon for recruiters to specify the expected value of bonuses as part of selling the position. If the bonuses are subsequently slashed, this feels bad, even though you don't have it guaranteed by your contract.

If Google is like Facebook in this respect then a senior engineer who "meets expectations" in a performance review stands to make at least 15-20% of their salary as a bonus. If you get below "meets expectations" you are probably going to be fired very soon. Hence your "meets expectations" bonus target is essentially no less guaranteed than the base compensation you would also lose out on if you were fired. The bonus target at companies like this is not an "above and beyond" bonus. There are bonus multipliers (and potentially non-standardized discretionary equity bonuses) for higher than expected performance.

And giving less of a bump on promotion.

So someone promoted 2 years ago? They may be on a not insignificant amount more than you for no other reason than timing.

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