Tet bonuses: bad rewards for good performances?

January 26, 2022 | 06:17 pm PT
Le Van Thanh Solutions architect
In Vietnam, the process of determining Tet bonuses is too subjective and non-transparent. It guarantees dissatisfied employees no matter what the payout. We can and should do better.

At a Vietnamese firm I used to work for around a decade ago, I once got a Tet bonus that was eight months my salary, more than enough to splurge on myself and my nieces and nephews when I gave them their li xi envelopes that year.

But the very next year, that bonus went down to just four months' worth. I didn't understand how and why it happened, since I had clearly worked twice as hard and handled twice the workload I had done the previous year.

The process of determining one's Tet bonuses seems to be a mystery in many Vietnamese companies. No one knows exactly how it works. It depends not just on one's work performance and the performance of the company, but the "mood" of the bosses, too. It is simply not a transparent process, most of the time.

It's been nine years since I moved on and began working for multinational firms. Unlike Vietnamese firms, I get no Tet bonus at the end of the year. But that is not because the company is doing poorly or my boss hates me, but because I already get my bonus every month.

I once worked for three different U.S. companies, and they all had the same way of handing out bonuses. The moment workers sign their contracts with the company, they know exactly how much money they would get every month and the reward they will reap if they achieve certain goals.

Contracts outline workers' on-target earnings (OTE) in detail, which include a fixed amount of money to be received every month plus a bonus based on work performance. Each position would have different goals and targets, like the number of products sold or customers' satisfaction scores.

An OTE means workers objectively and transparently know how much they have achieved. Their work performance becomes the sole indicator for how much bonus they earn, independent of their bosses' inputs. That way, the workforce can cooperate effectively with each other to achieve common targets and reap mutual rewards.

My colleagues and I love this system. It helps me a lot when it comes to balancing my finances throughout the year, and I don't have to worry about how much bonus I would get at the end of the year.

A Vietnamese business owner once told me Tet bonuses are a way to foster employees' relationship with the company. I beg to differ.

In mid-2013, after six years of working at a Vietnamese firm, I changed jobs to work for a foreign company. Even though I had dedicated the first half of the year to my former company, no one called me at the end of the year to get my Tet bonus.

Handing out Tet bonuses also means that employees may hold out at the company for another month or two to get their money. However, after the holiday ends, companies may see employees leave, even en-masse, in search of better opportunities.

At foreign companies however, you usually get your hard-earned cash even after you quit. A company I used to work for paid me the rest of my salary for the month when I quit, and two months after, I got my bonuses for the projects I had completed while I was still working for it.

The arguments for and against Tet bonuses actually come down to two aspects: one where workers get to determine how much they are paid; and the other where bosses decide for workers.

I understand that companies cannot anticipate how well they will perform until the very end of the year. But if Tet bonuses still apply, workers would only know how effectively they've worked at the end of the year. That could be a problem by itself.

Surveys on welfare policies and Tet bonuses in Vietnam's work market by Vietnamworks and HR Insider in 2019 revealed that no matter how much companies give out, there are always employees who are dissatisfied.

Of the 500 HR experts and 3,400 workers surveyed, 82 percent said they would "react" if their Tet bonuses were not what they expected, and 27 percent said they would quit their job for a better one. The long-standing tradition of giving Tet bonuses has inadvertently entangled workers' job satisfaction with the amount of bonus they get.

I know this well: despite having received a Tet bonus worth four months of my usual salary, I still felt that I deserved better.

Work policies and cultures cannot change overnight, for sure. But one thing Vietnamese companies can do right now is to replace Tet bonuses with OTEs to make the process more objective and transparent. It is a long-term, sustainable solution towards better retention rate, job satisfaction and brand image.

*Le Van Thanh is a Solutions Architect for Google in Singapore. The opinions expressed are his own.

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