By Dr Masimba Mavaza | As Zimbabweans reflect on their growing affluence over the last four decades, it is timely to remember that bonus as an integral part of the remuneration system has contributed significantly to their good life.

Payment of bonus now permeates both the public and private sectors, and has even spread to domestic employment, as an incentive for promoting employee loyalty or efficiency. It represents a sizeable portion of many Zimbabwean’s annual pay package.

Bonus started as thank you and has now become mandatory yet it is just a gift.

From its lowly beginnings as an ex-gratia reward for services rendered, bonus became a crucial industrial relations issue after the Second World War, culminating in its absorption as an important component of Zimbabwe’s wage system. It has become a custom and now worker’s think bonus is a right. Thank you, but it is not a right. It’s simply a privilege. The way it is demanded one would believe that it is a right.

Some companies used to give Christmas hampers as bonus.

Without it, many of us will be unable to enjoy Christmas; own cars, properties, stocks and shares, or to indulge in holiday resorts, tertiary education for our children may also be beyond our reach. January disease will become January death.

What are the origins of our bonus payment system? Is it indigenous to Zimbabwe or did we import it from elsewhere and refine it to suit our changing needs and circumstances? It would appear, from various available sources, that it had its genesis in the UK and later spread overseas ironically the UK has since abolished the bonus system. It is counter productive especially in the present economic situation.

However, besides the UK, Chinese records show that, as an incentive payment, bonus came into usage during the Song Dynasty (960-1276 CE). It later became a common practice for employers to give bonus to their employees for their loyalty and industry.

When Zimbabwe gained independence the system of bonuses was inherited, now most sectors are run by the Chinese.

Unlike the European businessmen with superior financial resources, the Chinese traders had, perforce, to embark on modest ventures because of lack of capital. The Chinese are then engaged mainly in the sundry goods business or the planting of pepper and selling. Those who hire workers paid them pittance compared to European employers.

Through sheer hard work and thrift, the Chinese employer’s business grew in scope and profitability over time and the profits are channelled to China at our expense. When this is done there is no ploughing back of profits and the workers won’t get their bonuses. The most painful thing is tax is evaded and the country suffers more. It should be quickly noted that not all Chinese business  persons are tax evaders.

To cater for future expansion, the Chinese needed cheap and familiar labour whom they could easily abuse and control.The answer lay in recruiting them from the unemployed populace of Zimbabwe.

This brought into being a flagrant chaos in the labour market and in most cases the authorities turn a blind eye.

In this confused labour system the bonuses are becoming things of the past.

The more humane Chinese employers began to realise that it would be in their long-term interest to treat their workers better. They therefore offered a traditional bonus payment, as an incentive. This would normally be given after the close of business accounts on Christmas Eve, provided the trading results justified it.

While bonus payment is a common practice among Chinese employers and emulated by European and other employers here in Zimbabwe paying of bonus becomes difficult.

The unfair labour practices perpetrated by unscrupulous employers continued unabated until adverse public opinion forced the Government to implement the existing labour laws.
The great depression of the 2008 brought gloom to the Zimbabwean economy. Wage reductions and mass retrenchments ensued, and discretionary bonuses were discontinued. After the slump was over, the Zimbabwean workers regained lost benefits, including bonuses but this proved to be an economic suicide. Pleasing the electorate at the expense of economy was not a very good idea.

There should be a tribute to the diligence, thrift and strength of character of Zimbabwean workers that, despite adversity, many rose above their humble antecedents and built up vast business enterprises which became the backbone of Zimbabwe’s economy.

The emergence of militant trade unionism caused employer’s discretion to be gradually eroded as workers sought a fair share of the profits which their efforts had made possible.

The sanctions wrought havoc on the Zimbabwe economy, which was plagued by serious problems of high unemployment, rampant inflation and ballooning of prices for essential foodstuffs like rice.

Bonus payments were staggered until employers could absorb such abnormal wage disappearance.

Wages became the most crucial industrial relations issue.uncertainty and fluctuating dates of payment became the norm

The Discovery of diamonds brought with it an unexpected economic bonanza to Zimbabwe due to unparalleled world demand for Diamonds with attendant sharp price rises. This benefited all sectors of economy, particularly the mining industry. Generous bonuses, ranging from six months’ to one year’s salary, were commonly granted to employees as great fortunes were being made by some employers until corruption invaded the Diamonds.
To combat the deteriorating industrial relations climate, it enacted the landmark labour legislation to regulate working hours and other essential employment terms.

Notwithstanding these measures, industrial relations continued to worsen. Having made inroads on the wages front, unions now demanded that bonus be negotiable.Some employers gave in to union pressures, with serious implications for them later. Workers’ strikes and other forms of work stoppages were rampant. Because bonuses were taken from nowhere industries busted.

Much had been achieved by trade unions on bonus. Collective Agreements between employers and unions would commonly have a mandatory bonus clause. Consequently, there was hardly an employee, in the public sector, who would work without bonus. It had become part of the wage structure.

To offset this, and to encourage more foreign investments the Government, with the active cooperation of employers and trade unions, enacted the Employment Act. Together with amendments to the Industrial Relations Act, they streamlined statutory employment terms and ridding Zimbabwe of restrictive labour practices which had hitherto harmed its economic interests.

To reduce employers’ operating costs, the law must limit bonus claims to not more than half a month’s wages. Employers already paying higher amounts would have the quantum frozen at that level. Bonuses should reflect the progress of the economy.

By taking the above measures, coupled with pragmatic economic planning, foreign investments will pour into The country. If bonuses are cut or limited economic boom will result leading to double-digit growth. By the end of 2019 the Government’s farsighted economic policy will succeeded, as Zimbabwe will begin to enjoy near-full employment. Bonuses are as good as ghost payment. Stretching a year by one month is an economic disaster. It is a painful decision but a fruitful one.

In recognition of workers’ cooperation and sacrifices, which had helped make the economic miracle possible, government must appeal to employers, who had done exceptionally well, to consider making ex-gratia payments to their employees over and above the statutory bonus ceiling if there is Nonetheless, the more enlightened among them will respond positively to the appeal.

Employers’ organisations must appeal for scrapping the bonus system and replacing it with wage reforms that would compensate such loss. Not surprisingly, bonus is a burning national issue, with the whole community debating its merits and demerits.it should be noted that.

To emulate the private sector remuneration practice, the Government around introduced the 13th month bonus payment to all levels of public servants in order to bridge the income gap of private and public sectors employees and to make the public service careers more attractive to those on their payroll. As a further incentive,this payment was later further enhanced to be closer to the private sector practice. Unfortunately our economy can not stand such luxury anymore.

The recession brought about the need for wage reforms. The government introduced a flexible salary System which has no fixed date components.

The original purpose of bonus, as an incentive award, had, over time, become firmly entrenched as a feature of the Republic’s wage structure in both the private and public sectors.

What about the Public sector personnel? If economic growth justifies it, the lower ranked public servants can expect to receive two and a half to three months’ variable bonus payment. In addition to the above bonus, senior public servants can reasonably expect a quantum of about six to ten month’s performance pay reward, while the very top echelon of them, like Cabinet Ministers, up to fourteen months’ pay.

Nowadays collective bargaining is usually conducted in a much more friendly and rational way, free from the acrimonious atmosphere of the more antagonistic past era. Major terms of employment, like salaries and bonuses, are usually resolved with give and take on both sides in the overriding national interest.

What will happen to Zimbabwe’s bonus system in the coming years my common sense tells me that it is definitely here to stay. It has become, and will continue to be, an inalienable part of our remuneration system for salaried persons. New forms of bonus payments will no doubt evolve in response to changing economic trends and the national fortunes of a more competitive Zimbabwe.

Disadvantages of Bonuses;

Unrealistic Expectations

While employee bonuses can encourage productivity, they can also bring certain disadvantages to a company and its workers. One potential drawback of offering the bonuses is that they can create unrealistic expectations among employees. For example, if a small business gives substantial bonuses one year because profits were high, but has poor profits the next year, employees might expect bonuses again even if the company doesn’t have the money to pay bonuses. Employees who receive bonuses one year and nothing the next year may feel disappointed, which can hurt morale. They end up thinking that bonus is a right and will cause unnecessary industrial actions for a privilege.

Employee Competition

Another potential disadvantage of employee bonuses is that they can foster competition between employees rather than collaboration. For instance, if a small business offers bonuses based on hours worked during the year, employees may be less willing to share work with one another. This can lead to inefficiencies, such as certain employees taking on too much work while others have too little, or employees performing tasks outside of their areas of expertise.

Attracting Talent

While bonuses can provide a way to reward top-performing employees, employees often focus on annual salaries and benefits when looking for new jobs. A company might be more successful in attracting top talent by offering higher base salaries, wages or other guaranteed benefits than by reserving money for extra incentives like bonuses. Bonuses are like icing on a cake: they can be nice to have, but salaries and benefits are the real substance of employee compensation.

Taxation of Bonuses

Another disadvantage of bonus compensation is that bonuses are subject to special tax withholding requirements that can significantly reduce the amount of money employees actually receive at the time bonuses are paid. According to the IRS, bonus pay is often subject to 25-percent tax withholding, and that may be as high as 35 percent for those with high incomes.

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