Due in part to the Affordable Care Act, the legislation that requires companies to provide employee benefits to full-time workers for those who have at least 100 people on staff, more people have health insurance today, totaling nearly 90 percent last year, according to the most recent data from the U.S. Census Bureau. At 55 percent, most people get their health care through their workplace
But one thing that companies aren't supplying their employees with as much of are bonuses for a job well done – at least not as much as they have in the past, based on a newly released survey from Towers Watson.
For the fifth year in a row, employers aren't planning on fully funding their employees' annual bonuses in 2015, reported Towers Watson, a leading global professional services company. Bonuses – which usually come at the end of the year in the form of financial compensation on top of what someone makes in weekly salary – frequently serve as a recruitment tool, as once workers are aware they're offered, they can motivate workers to go above and beyond the call of duty.
Businesses' projected bonus funding down from last year
However, U.S.' companies average projected bonus funding for 2015 is 89 percent of its target for current-year performance, the report detailed. That's down from 93 percent in 2014 when the same companies were surveyed. In the last decade, companies have fully funded their bonus pools just two times.
Laura Sejen, Towers Watson managing director, noted that as has been the case for several years now, businesses – whether large or small – seem to be hedging their bets when it comes to performance bonuses.
"Employers are continuing to take a conservative approach to funding their bonus pools," Sejen explained.
Still, some companies are opting to provide staff with financial compensation, despite their failure to meet a targeted goal. The survey found that 30 percent intended to give out bonuses this year, even though expectations weren't met.
"While most incentive programs are designed to recognize and reward employees for individual performance, the fact that some companies continue to deliver substantial bonuses to weak performers raises questions as to whether they are investing their bonus dollars as effectively as possible or truly holding workers accountable for performance," Sejen said.
Bonus pay must be used wisely in today's job market
She added that with more employers hiring, it's becoming more difficult for employers to retain their employees. It's for this reason that businesses need to exercise more discretion when it comes to rewarding workers for their efforts, as bonus pay is the type of thing that today's workforce analyzes when deciding to stay with a company for the long-term or take their chances with another employer that may have better fringe benefits.
Similar to bonus pay, employee benefits often serve as a motivation for workers to stay with a company, or pursue an opening with a rivaling business if the benefits are more generous. Of the subtypes of health insurance, most people received employer-based coverage, comprising more than 55 percent of the U.S. last year, the Census Bureau reported. Second to employer-based was Medicaid at 19 percent, followed by Medicare at 16 percent, direct purchase at nearly 15 percent and military health care at 4.5 percent.
