When I was thinking of leaving government, I was confronted with a dilemma. There was the 13th month Annual Wage Supplement (or whatever else they may call it); if I tender before January, then I would sacrifice that.
But then if I had stayed on for another month, it’ll be only 3 months before I get my annual bonus. That’s a big one, it could be worth 3 months salary, which means basically every month I stayed on, I’m getting paid twice my salary.
Then I thought, if I had stayed till April, I’d be just 2-3 months away from the mid-year bonus. It might not be so high given Covid and all, but maybe it’d be 1-month worth. That means every additional month I stay is worth ~1.5-month salary. And so on, and so forth.
If I practice that sort of marginal thinking, I would almost never leave my job. That sort of financial manipulation to “manage talent” may be smart, but it wins no one’s hearts.
In some sense, value of your labour withheld from you, again and again – then used to manipulate the staff in favour of the service. Because look, you had worked the entire year, but yet you don’t get the annual bonus until April next year when you had worked another quarter. And if you leave any time before that, you lose the ‘bonus’ entirely.
Of course, if your values align well with the organization, all of those considerations are really completely moot. So such a system does not help to ‘retain’ those who would have stayed anyways. Question is, why are we trying to ‘retain’ those who would be staying just for that sort of manipulation? Is it good for the service?
On the other hand, there can be entirely good reasons for such a system of bonuses. It allows the government at the end of the day to decide to pay out more if the economy is doing well and to reduce it when it isn’t. This allows the bonuses to be a very strong valve for them to steer the labour cost of the public service budget. After all, it seem to have had worked well in the past; the tricky thing is whether the new generation will buy it.