I have noticed that several companies offer joining bonus to a prospective employee to join early (or shall I say "immediately").
I was wondering if this is a right tradition? Is this ethical?
I see it this way –
A guy is working in Company A and he has a notice period of 30 days. if he wishes to terminate his contract/job with Company A and move to Company B he need to serve a notice period of 30 days to Company A. This is supposedly required so that he can transfer his responsibilities in a proper way to an assigned person by Company A enabling them to maintain the smooth function of the organization in his absence. However, Company B tells the guy – "If you can join us within 7 days, we are willing to pay you a joining bonus of $X.
I personally feel that it is like bribing the person to go against the separation clause of the employment agreement, so that he can pay for any financial loss (that might arise from any penalty clause) and enjoy a bonus amount – all for doing something wrong! I see this happening almost everyday.
Don’t you think this HR practice is unethical and is further rewarding people to stoop low for some quick bucks?
What do you say?
I have the same feelings about this. How a company is offering such things? The person may do the same thing with that company too for his future benefit and the company(more truly customer focused company) may incur loss due that practice.
This unethical practice should be stopped and company having ethical sense can only stop this.
Companies are following unethical practices to gain in the short run and have a competitive edge over others.
But in the long run i think companies with high ethical standards will not take such candidates and candidates who want to join good reputed companies will follow higher ethics.
Hi Abhishek.
I might be the last person to read and reply this post.
Buy just wanted to tell u that joining bonus is paid, generally, for two reasons –
1) To give value added to the loyal employees of seniors posts.
2) In other case, Joining Bonus is offered so that employees can compensate by paying in exchange of their notice period. I wont say it is ethically wrong if you follow the procedures properly because if a company is ready to pay joining bonus, that means they need some one at the earliest too…its trade off of responsibilities with company policies.
Hi Bipul,
Thank you for contributing your thoughts. Much appreciated.
1) I do not feel joining bonus can be a value add to a “loyal employee” since the loyalty is yet to be tested. Also, in my understanding rewards should not be linked to seniority, but the achievement and “positive action” which aligns with the goal of the company.
2) I still feel that it is ethically wrong. May be, because I am at the receiving end when a guy jump ship to make his so called career (I am surprised that a long term career opportunity cannot wait a notice period) leaving behind the company struggling to complete the project.
It clearly is a selfish act on part of the employee who is taking the joining bonus and the company who is offering the same.
At no point of time individual gains can become bigger than the work (i.e. the purpose for being in that job). Think of a surgeon jumping hospitals every few days, leaving patients to suffer in the post operative care! Would you like to be in such a situation? The end result of such thing is that people will stop trusting doctors. And if you draw a parallel, if this continues, people will stop trusting IT companies!
Regards
Abhishek
Hi Abhishek,
Good to c your prompt reply. u do it passionately, it seems. I think you have somewhere somewhat mixed my post in reading or understanding.
I mentioned two cases and they are not interlinked. joining bonus for loyalty is different from joining bonus in exchange of notice period.
” 1) I do not feel joining bonus can be a value add to a “loyal employee†since the loyalty is yet to be tested. Also, in my understanding rewards should not be linked to seniority, but the achievement and “positive action†which aligns with the goal of the company.”
Joining bonus is offered to show that the company is as happy with the employee’s joining as it is ready to pay as upto one year’s salary or give stock options etc. Company’s decision is made on the analysis that this new employee will fetch more than what is being paid to him. much more to be precise. Achievements can only take you to higher positions(seniority).
“I have noticed that several companies offer joining bonus to a prospective employee to join early (or shall I say “immediately”). “I was wondering if this is a right tradition? Is this ethical? ”
Company has expectations from its share holders and investors and also needs to cater the competition.ie- they have to take such firm decisions. Its absolutely ethical from company’s prospective.
However ,
“when a guy jump ship to make his so called career (I am surprised that a long term career opportunity cannot wait a notice period) leaving behind the company struggling to complete the project.
It clearly is a selfish act on part of the employee who is taking the joining bonus and the company who is offering the same. ”
Its the employee’s responsibility to take the decision on his and his company’s(previous) behalf to serve or not to serve the notice period in exchange of hard cash. Not every time it has to be a doctor neither a project incharge leaving the patient or project in between. But yes, in either cases the company has to suffer.
I strongly believe if I hire an employee and ask him to not to serve his notice period and he agrees, he will do the same to me for a new company in some years time! I have a very small eCommerce company(micro sized) but I make sure to convey the feeling of responsibility to all my employees. After all, small companies are the worst hit in this employee popping in and out journey.
I am just a beginer, but a good observer. what all i have written is simply based on my perception and not on experience. So, happy to discuss more on it…. 🙂
regards
Bipul
Hi Bipul,
If a company is offering joining bonus to attract and make the employment look more lucrative as an overall deal, then it looks fine. However, offering joining bonus to come and join “today” and dis-honor the current agreement with the current employer is something I will never subscribe to.
Abhishek
I feel, that it would be ethical only incase where the notice period is long like say 3 months or so. My personal experiences say that once you put in your resignation, the very next moment onwards you are an outsider. You are not considered as a part of the company any more. All the accolades showered on you earlier seem to have vanished from memories. You are banned from attending meetings etc. All important communications by pass you directly to your successor, lest you leak the information to your future employer, many more reasons etc. etc. The severance becomes painful to the employee. In this case the faster the severance the better it is for everyone. Moreover, it usually does not take much time to hand over the responsibilities since no one is indispensable in an organization.
Finally, the joining bonus received from a new company need not be looked at as a bribe, because this amount will be used to pay off the company you prefer to leave as notice pay. I guess it get equated here. (As the Hindi saying goes “Ek Haath Le, Ek Haath De”) The amount is just passing through. Well, nothing much to gain personally except for some peace of mind and positive attitude towards the new work.
Therefore this will lead to a lot less bad experiences and you will get your relieving letter and final severance dues too. (After all we all work for a combination of various things, like a handsome pay, job satisfaction; peace of mind etc may be not in the mentioned order)
This debate can go on, because we cannot measure ethics with practicality. What might seem unethical to some may seem practical to others.
I feel, that it would be ethical only incase where the notice period is long like say 3 months or so. My personal experiences say that once you put in your resignation, the very next moment onwards you are an outsider. You are not considered as a part of the company any more. All the accolades showered on you earlier seem to have vanished from memories. You are banned from attending meetings etc. All important communications by pass you directly to your successor, lest you leak the information to your future employer, many more reasons etc. etc. The severance becomes painful to the employee. In this case the faster the severance the better it is for everyone. Moreover, it usually does not take much time to hand over the responsibilities since no one is indispensable in an organization.
Finally, the joining bonus received from a new company need not be looked at as a bribe, because this amount will be used to pay off the company you prefer to leave as notice pay. I guess it get equated here. (As the Hindi saying goes “Ek Haath Le, Ek Haath De”) The amount is just passing through. Well, nothing much to gain personally except for some peace of mind and positive attitude towards the new work.
Therefore this will lead to a lot less bad experiences and you will get your relieving letter and final severance dues too. (After all we all work for a combination of various things, like a handsome pay, job satisfaction; peace of mind etc may be not in the mentioned order)
This debate can go on, because we cannot measure ethics with practicality. What might seem unethical to some may seem practical to others.
yes u might claim thats unethical but i would not completely agree with this as far as the employee is paying the penalties there is not unethical thing coming in. Even the Company A does not loose anything so compromises on a penalty and asks the employee to pay the notice period shortfall amount, if the employee receives a bonus of $x he is paying a penalty also of $x-penalty…so i think thats a fair deal.
yes u might claim thats unethical but i would not completely agree with this as far as the employee is paying the penalties there is not unethical thing coming in. Even the Company A does not loose anything so compromises on a penalty and asks the employee to pay the notice period shortfall amount, if the employee receives a bonus of $x he is paying a penalty also of $x-penalty…so i think thats a fair deal.