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I just don't understand the mentality behind looking for reasons not to pay out bonuses. I see it all the time. It baffles me. When people have credible claims to incentive compensation, just freaking pay them. Almost by definition, we're talking about sums of money with very little marginal impact on the company; those same sums often have unpredictably huge impacts on employees.

Forward-looking, employees-only, whatever: not paying is more costly than paying. It sure as heck is here, because this ended up being Miso's introduction to a huge swath of potential candidates down the line. What a debacle.

If you have legitimate concerns about abuse of bonus programs, the problem is with the structure of your bonus program, not with how you enforce payouts.

> Almost by definition, we're talking about sums of money with very little marginal impact on the company; those same sums often have unpredictably huge impacts on employees.

This should be the way every employer sees bonuses. The have huge potential negative and positive impacts, with most of the negative being mitigated by adhering to the rule, "don't be a dick." When in doubt, pay them anyway. The complex positive effects you can't ever fully predict will almost always outweigh the minor negative and predictable impact to your bottom line.

Same goes for not giving refunds to customers, and using the right-hand lane to attempt to pass on the highway. It might seem like the best thing to do at the time, but some unpredictable event out of left field will put you three miles back and cursing your short-sighted decisions before you can say "Oldsmobile."

It's really not the same as giving refunds to a customer. Keeping your customers happy is really important. Keeping your employees happy is also important. Keeping ex-employees happy is really not that important. Personally I might have paid it out, after all they got the referral so it's fair. But it's not MY company's money. In my experience as a games programmer bonuses were very rarely paid to people that left. The soul reason for them is employee retention and when the dude has gone he's gone.

"Keeping your employees happy is also important. Keeping ex-employees happy is really not that important."

I wonder if the people making the "lets not pay him" decision have discussed the issue with the people who are hiring their next employees for them? (Or the managers who're asking existing employees to refer friends with referal bonuses of now dubious reliability?)

> It's really not the same as giving refunds to a customer. Keeping your customers happy is really important.

Reason for giving refunds is because it is the right thing to do. That is what should be the basis of decision. Otherwise you run into troubled waters as soon as you need to choose between 2 parties. Who should you make happy? Customer or the investor? Customer or the employee? employee or the investor? And such situations arise all the time.

> The soul reason for them is employee retention

But that is not the reason for referral bonus. Its aim is to encourage people to refer their friends for hiring. By doing this, do you think Miso has achieved the desired effect on the current employees? To put it more bluntly, do you want your employees, who have a possibility of leaving with in 6 months time frame to refer their friends? Given how difficult hiring is and if they are looking to hire, I would pay the referral bonus even if they left before it can be claimed.

Integrity isn't about technical or legal validity. It's about having made an agreement with someone, and honoring it.

Finding a semantic or legal way to breach an agreement is wack. Extra-much so if due to interpersonal static.

I don't know the parties involved nor do I like the attempt to adjudicate the matter in the court of Internet public opinion, but I do understand why folks are reacting to the story.

I would argue that it is the employee, and not the employer, that is searching for a semantic or legal way to breach an agreement. The agreement was that employees (not ex-employees) are eligible for referral bonuses. He failed to settle this issue during his time as an employee, and is now searching for a semantic or legal method to do so as an ex-employee.

Splitting hairs over a commission when you make money on a deal is going to cost you a lot more than just paying out.

Next time that deal will go to a competitor that has no qualms about paying, even to non-employees.

This sends all the wrong signals.

It's not a bonus. It's payment for services rendered. They offered $10k for a service. He performed the service.

Say I take a cab home from the airport. The money I give the cabbie upon arrival isn't a bonus -- it's payment for services rendered. (The tip is the bonus.)

You guys can both be right and it still doesn't matter. If you're going to offer bonuses or incentive comp of any sort, plan on paying them. You should be allergic to any reason for not paying short of "there is no credible claim to being owed this bonus".

It's definitely true that bonus programs are usually intended for existing employees. Concrete example: my last employer blew out their numbers the year I left the company; I wound up in a 6 month transitional role (and a few additional months of outside consulting) after a cordial mutual understanding that I was going to leave. The whole company got a massive bonus. I got a negligible bonus, even though I was a full-time employee, and even though the bonus accounted for multiple years where I was a full-time, fully performant employee with no stated intention to leave.

Am I mad? Nope! Most of the (unstated) point of the bonus was employee retention. I was unretainable. Paying me a giant bonus was irrational.

I think that's the same sentiment 'cletus is talking about, and to that extent, I'm totally with him.

But the answer to most disputes about bonuses should generally be "I'm sorry we let this escalate to a dispute, it's important to us that everyone knows we deal fairly with the team, and so we're paying you the bonus. We wish you the best."

"Most of the (unstated) point of the bonus was employee retention. I was unretainable. Paying me a giant bonus was irrational."

This is why I feel _some_ sympathy for Miso - they've got a scheme intended to improve retention. They then put in a set of requirements, goals, and milestones that didn't provide appropriate incentives for the behaviour they wanted to promote - they _weren't_ looking to reward guys who were going to bail after 12 months for hooking up their friends who were going to jump ship in 7 months. But they chose a set of metrics that means the OP had every right to feel entitled to his $10k.

But Miso have handled it _very_ badly (on the assumption that the blog post is an accurate reflection at least of how the poster saw the situation unfold).

If I could upvote your last sentence several more times, I would…

>Failing to file a referral bonus form while you were an employee is really your fault.

Congratulations, you're an asshole that I never want to work with.

Amen to that. Part of the job of a manager is to look out for the people doing the actual work. Taking ten large from a trusting employee is bad. Blaming the employee for leaving the cover sheet off his TPS reports is worse.

So none of the responsibility of what happened belongs to the OP?

I am not siding with his former employer, but anyone who has any work experience knows that they should make sure the cheques have cleared as soon as they have an idea that they want to leave.

It's a cynical view, but people should always expect a company to be less than cooperative once they leave, even when the company is in the wrong. I have found this to be even more true when dealing with smaller companies and startups.

When money is involved, it's better to be realistic than idealistic.

It's your own responsibility to tie up loose ends before you leave. After you leave, you should work with the assumption that you'll be the only adult at the table when dealing with your former employer.

If you get beat up walking down the street, is that your responsibility? Sure, in the sense that any idiot can always find ways that you could have avoided it if only you had done something differently. And in the very obvious sense that nobody else can suffer through the pain of a broken nose for you.

Seriously, it's not common sense to assume that an employer will behave stupidly once you announce your intention to leave? You should assume that you'll get walked out when you hand in your resignation, and that after that, your former employer will not play nice.

In small companies, I've seen owners contemplate/prepare nuisance lawsuits just to make examples out of recently exited people for sheer pettiness. And these were employers who would have been perceived as stand-up guys before the people quit.

It's a pretty old rule of thumb that you get your ducks in a row before quitting, just like you shouldn't accept any counteroffers from your employer after you hand in your resignation.

The OP gets some sympathy from me for getting shafted, but he gets no sympathy for being naive about how to leave a company.

Isn't it common sense to assume that there are dangerous people in the world? People getting assaulted should have known and taken appropriate precautions. I don't have any sympathy for them. Don't they read the papers?

Well, people wear seatbelts, helmets, etc. Do you knowingly walk down a dangerous street flaunting your wealth?

You're not getting it. With hindsight, you can always find a way to blame a victim. It's great fun: you get the chance to look knowing and smug, and your success rate in predicting the past is 100%.

Don't kick people when they're down. You end up looking like a heartless jerk.

I tend to think you're not getting it.

He's not a victim of a random crime (per your analogy, which to me is not apt), he's a victim of his own naivete and inexperience.

In the same way you had better know to take all of your most expensive gadgets out of your soon-to-be ex-girlfriend's apartment before you break up with her (lest they get smashed with a hammer), he should have done the same.

This is not even close to rocket science. To assume that people will behave like adults when you sever a relationship with them is extremely naive.

In that same vein:

It was the company's responsibility (too) that there was no database backup when he wiped it.

It will be the company's responsibility when the referred employee hears about this and has a diminished reputation of the company. Will it bite them in the ass? Probably. Maybe tomorrow, maybe next month, maybe in a year when things get hectic and the referred employee sees no reason to be loyal to these guys...

>> It was the company's responsibility (too) that there was no database backup when he wiped it.

I always say "If you fail to prepare, prepare to fail." I'm seeing a pattern here in the OP's behavior that led to him wiping the database and his naive reliance on his former employer to do the right thing before exiting the company. This guy has no clue about how to contingency plan.

As for the company, shame on them, but that kind of douchy behaviour is rampant in startups and small companies. You always need to look out for your own personal financial interests first with startups, no matter how 'collegial' the work environment is.

>It's not fair but it makes you look worse. You just kind of have to suck it up and move on.

My guess is this will negatively effect them more than it effects him. He's not badmouthing the company as a whole, he's badmouthing them reneging on a specific deal they made with him. They essentially earned $10K at the cost of advertising to devs that they are the kind of employer that will weasel out of a deals they make. Is saving that $10K worth that change to their reputation? Probably not.

"I'm not saying the employer is completely in the right here but honestly I think they're more right than he is and certainly come out of this looking better than he does."

This HAS to be the employer. I cannot imagine how someone can seriously think this. As a recruiter I have awarded bonuses to employees at 3 different companies and no one ever had to fill out a form, it was just a matter of if we paid him or not.

The company agreed to pay him a certain amount of money if he referred somebody who stayed for at least 6 months. He referred somebody who stayed for at least 6 months. The company thus owes him the money. His employment status with the company has nothing to do with it, unless that was stated as part of the deal up-front.

I'm pretty sure this would last about five seconds in front of a judge. Produce whatever documentation is available (an e-mail about it should be plenty) showing that they promised the money, and it's done.

It doesn't matter that he forgot to claim it. Unless he let it go for so long that the debt passes the statute of limitations (7 years or so?), it's still owed to him.

This is little different from spitefully withholding an employee's last paycheck, a practice which is wrong and highly illegal.

I wholehearted agree, but..

I'm pretty sure this would last about five seconds in front of a judge

This whole issue would probably cost 50k just to get in front of a judge.

Why? This would work pretty well in small claims, which costs not much at all.

Not sure about his location, but in New York small claims is limited to $5k.

It's stated elsethread that CA is $7,500. So that adds $2,500 to the cost, still well short of the claimed $50,000.

I don't understand.. there are 2 million lawyers in the U.S., so why is it so expensive?

For comparison, Europe in its entirety has less than 600.000 lawyers as of 2007, and while the U.S. no longer has more lawyers than the rest of the world combined, it is pretty close.

Interesting offtopic point: there is one lawyer per inmate in the U.S.

> I'm pretty sure this would last about five seconds in front of a judge.

Would it? I think the judge will see it as 'refer somebody who stays for 6 months and submit a claim to get your bonus'. I doubt any documentation on the bonus would say that you get the money automatically credited - so any T&C on how to claim the bonus would legitimately be considered part of the agreement. Since the employee failed the last part of the condition, the company would win.

He didn't fail it, it was just a bit late.

He left the company - he failed the condition. Once you leave a company, all your contacts are ended.

"Once you leave a company, all your contacts are ended."

Um, no. Assuming you meant "contracts", but in either case, no. That's not how it works.

Nonsense. Lots of contracts can last after you stop being an employee, e.g. Non-compete contracts, non-disclosure agreements etc. If the employee leaves the day before their final salary payment is due, does that mean the company is no longer legally obliged to pay them? No.

I would agree with you that "naming and shaming" at this point is not in his best interest, however there is no question his employer should pay him in an ideal world.

referral bonuses are paid to employees. He is not an employee.

There is a big difference between "Referral bonuses are only due to employees" and "Referral bonuses are only paid to employees". At one point in time he was an employee and hence was due the bonus. The bonus was not paid to him at the time though.

He is still due the bonus.

+1

This guy Joshua Z.H. Wu does not come out looking good in this blog post. He doesn't realize it, but he just lost a lot more than $10k in lifetime earnings too. Someone willing to nuke something that their friends/coworkers built in this fashion is just not someone you ever want to hire. You find this kind of crap on Google, and you just don't call him back or offer an interview.

After all employers are human too, and when you delete the production db, make everyone pick up your mess, quit, and then have the stones to ask for your long-forgotten referral bonus for current employees in a chipper tone when you are already at another company...yeah, he's kind of a douche.

I'm sure he can be legalistic about it, and I'm sure there are no end of lawyers out there willing to huff and puff about the evil employer but...douche.

I find the reactions here fascinating. There's a hugely bimodal distribution here between people who sympathize with the employee (I'm in that set: the guy's out ten thousand dollars, who cares about feelings or "employers being human" at that scale?) and the employer.

I'd guess the latter are mostly founders, or people lurking here in the hope of someday being founders. And that makes me sad that so many of you think it's morally acceptable to promise large bonuses to your employees that you intend to pay only if reminded about it.

I agree. I'm having a really hard time understanding the people who are defending the company here.

I can understand, if not sympathize with, the guys at the company doing what they did. Emotions get in the way, and it sounds like they were kind of angry. In that situation, it's only human, even if not right, to decide the answer first ("no") and then rationalize it.

But I can't understand why you'd defend them without any skin in the game. Maybe people don't think that an exchange which isn't written out in legalese and signed doesn't constitute an obligation? Maybe they're trying to approach it from some sort of karmic perspective, where somehow fucking up the database makes him no longer deserve the money he was promised for something completely unrelated?

It's bizarre. And troubling. Personally, I would say that this is about as cut and dried as it comes.

There are quite a few things in life that are based on you remembering something. Remembering to pay your taxes on time. Remembering to register for the Selective Service upon attaining the age of majority. And remembering to cash in your bonuses and vacation days BEFORE quitting and burning bridges, not after.

This guy isn't a current employee. There wasn't a contract signed. That is a gaping hole wide enough to drive a truck through when someone has burned through goodwill like jzhwu has.

> I'm in that set: the guy's out ten thousand dollars, who cares about feelings or "employers being human" at that scale?) and the employer.

Wonderful. And how much do you think his database mishap cost them? Probably a lot more than $10k! And now he's attacking them on the internet. This is someone who is willing to cause hundreds of thousands of dollars in damage for what he's convinced himself he's entitled to, even thought it's a bonus for current employees.

Taxes and draft registration are legal requirements. So is paying your employees what you owe them. I don't see the asymmetry here. Bonus compensation is still wages (i.e. what line does it go on in your W-2?). You don't have the option to not pay wages to former employees, even ones you don't like.

And your last bit is IMHO horrifying. You clearly think it's OK to dock wages for mistakes on the job. That's both illegal (Wildly so! Don't try this on real employees or you can wreck your company.) and immoral.

Your stance is very black or white - either you're for the employee or you're a founder. I don't think it's quite that clear.

As an employee, I wholeheartedly agree that he should have been paid if he had some written form of agreement (email counts).

As a sensible logical person, I think he should have gotten paid when he was an employee especially since this was an employee perk.

I don't need to be a founder to know that he's not entitled to anything from the company when he's no longer an employee. What's the limit here? Can any past employee in the history of the company suddenly realize he's entitled to some perk, come back and demand it? And if he doesn't get said perk, publicly shame the company?

I assure you I'm not being one sided here; jzhwu and Miso clearly didn't part on good terms. It seems he's at least mildly incompetant. And he's clearly profane and confrontational. It's entirely plausible that the leadership team at Miso hates this guys guts for valid reasons and doesn't want to pay him a cent they don't have to.

And if this was a forgotten poster from his office or a lost book, no one would care. But it's ten thousand dollars. What do their feelings have to do with an obligation of that magnitude? Either they have to pay it or they don't. Who cares about whether he "deserves" it or not?

Also: you realize your intuition makes no legal sense, right? If you "agree that he should have been paid" then you are agreeing that Miso has a debt to jshwu. Debts don't disappear like that because of technicalities (or rather, not unless such technicalities are described in a contract that everyone seems to agree doesn't exist in this case).

Yes, debt can be (and usually is) zeroed out when you leave a company.

As I explained in another comment, most companies (don't know about Miso) make you sign an agreement during your exit interview that the company does not owe you anything except X, Y, Z items that are enumerated clearly (these usually include your last paycheck and check for unpaid vacation days).

Right, you're invoking the "technicalities in a contract" case I talked about. And indeed, that would change things in favor of the company if it existed. Is there any evidence such a contract was signed? Note that neither the employee, CEO or CTO mention such a thing. For reference: across 17 years and five jobs in software I've never signed such an exit contract in my life, nor been asked to. I'm sure it's done, but I seriously doubt it's standard -- especially at startups where contract rigor is hardly a priority.

So basically: I agree. But what does that have to do with the points I was responding to? Earlier you stated clearly that he was "not entitled to anything from the company when he's no longer an employee". Are you walking that back now?

I've also never heard about anyone ever signing something like that at an exit interview. Why on Earth would someone sign something like that anyways? At my last job at BAE:IS they tried to get me to sign an NDA when I left, but I had to refuse for various reasons and eventually they were satisfied with a nice note explaining those reasons paper clipped to the NDA form in my file.

It's more common than you think.

You might not see this in a small startup where the owners/managers don't have much business experience, but the rule of thumb is you NEVER sign this paper unless you're absolutely sure you will never cross paths with your previous employer again, no matter how much $ is dangling in front of you to sign it.

For a lot of departing employees, the stress of the situation leads them to sign it (i.e., sign now or you lose the chance to get this money we're dangling in front of you), which is often a mistake, because you are often signing away your right to sue them.

People who make good CEO's are more likely to be mentally ill than the general population - http://www.businessweek.com/magazine/the-stack-the-psychopat....

As a founder, I definitely sympathize more with the employee. I want my engineers thinking about engineering, not bullshit paperwork, or how to prevent me from screwing them.

Miso gained $10k in cash, but they lost a ton more than that in employee trust. A foolish bargain, I'd say.

Asking for money you're owed never makes you a "douche". It doesn't take stones to ask for what you're owed just because you caused some problems. There is no link between the two! I'm astonished that anyone thinks there is. There's absolutely no leeway to say, "I don't like what you did recently, therefore I'm not going to pay you the money you're owed for something completely unrelated."

There sure is leeway: no signed contract. If he had left on good terms they would have paid the bonus, no question. He didn't and his fuckup cost them a lot more than $10k. At this point, dig in their heels.

He says an email is a contract? OK, well, two can play that game. I'd bet that on the bottom of several of those emails there was something about "this email is only addressed to the sender, it may not be reposted anywhere".

Looks like Joshua Z.H. Wu is now in material breach of "contract" too. I'm sure a clever lawyer could come up with some sort of nondisclosure or material defamation claim. He wants to go to the mattresses, let's go to the mattresses.

Again, no need if he's a good guy. He's a good guy, they're good guys. If he's a douche, they have no obligation to be good guys.

> He says an email is a contract? OK, well, two can play that game. I'd bet that on the bottom of several of those emails there was something about "this email is only addressed to the sender, it may not be reposted anywhere".

Doesn't work that way. The e-mail in question was a back-and-forth conversation in which both parties clearly agreed. Your hypothetical bottom-of-the-e-mail notice is not. It may well not be enforceable.

I don't understand why you say "He says" here, as if this is some sort of fruity off-the-wall legal theory. Contract law is pretty clear that any agreement that meets certain conditions is a contract, and this e-mail almost certainly meets them. In theory, a simple conversation where the guy said "We'll pay you $X for a referral" and the other guy responded "OK" is legally binding. In practice, it would be hard to prove that it happened. It's really easy to prove that the e-mail happened, though. Did they promise him a referral bonus? Bam, done, legally binding contract.

But let's say it is enforceable. What of it? The company would have to show damages if they wanted to sue over it. What damages are they going to show, exactly? That their illegal refusal to pay their former employee got exposed? Good luck getting a judge to go along with that.

> Did they promise him a referral bonus? Bam, done, legally binding contract.

Nope, not if they actually have a pre-existing contract signed with other employees that states that the bonus is for current employees only. Then the email conversation is a reference to this pre-existing contract, which excludes Joshua Z.H. Wu in his current state.

And if you were the DBA at the company who was just caused no end of trouble by old jzwhu, you might remember that you signed a contract like that back in October or something.

He was a current employee when the payment was due, thus the money was owed then. That he later quit does not somehow erase the debt.

Contracts need an offer, acceptance, and consideration. "Consideration" just means that both sides should stand to gain something from the agreement.

Non-disclosure text at the bottom of an email seems like a real stretch for that. Of course it depends on the jurisdiction and the case law.