Budget Bonuses: Shoe Money

A few days ago I talked to a great HCIT candidate we’d placed years ago, just to catch up. We chatted – did the small talk thing for awhile – and finally got the real reason for the call. I knew it would eventually come out and boy, did it.

The conversation turned to compensation (as it does) and she told me about her deal. The base salary sounded fine when compared with her role and responsibility… and then I asked about her variable compensation or annual target bonus. There was a long pause, followed by (ok, me too) loud laughter at my question. “What bonus?!” she asked. “Oh, you mean my ‘shoe money’? Shoe money? She explained that for the past few years her company had decided to award small bonuses (i.e. $1,500-$2,000) at the end of the year. Her implication (which I get) was that after she pays taxes on the small amount of money, what’s left barely pays for a newly touted “staycation” or perhaps a trip to the shoe store to buy a few pairs of nice pumps.

• That’s it?!
• Are you kidding me?!
• C’mon – why bother?!


The company clearly needs to take a hard look at their compensation package and their 1% – 2% target annual bonus plan. It’s a little low for this hot market. It’s a plan that just sounds bad and will never keep and retain the best talent in the company. I can see it now: “Work hard and meet all of your objectives and I see a trip to the shoe store in your future.” Actually, they’d be better off not paying anything. How demoralizing. What a joke!

Retention is a very big deal in the markets we serve and the battle for talent is already here – that train has left the station. Find a way to keep great people or risk a void in your starting lineup. It’s not all about the money, either. People want to be rewarded for this hard work, but recognition, new and exciting challenges, teamwork, a great collegial culture also matter.

But getting back to the shoe-money…

What are your thoughts? Want the shoe money or should they just pass altogether? I would love to hear the opinions of the readers of HITT and…

I’d like to start with you Ms Darling.

Tell me how you really feel…. I already know you will!

About the author


Tim Tolan

Tim Tolan is the Senior Partner of the Healthcare IT and Services Practice of Sanford Rose Associates. He has conducted searches for CEOs, presidents, senior vice presidents, vice presidents of business development, product development and sales. Tim is also the co-author of "The CEO’s Guide to Talent Acquisition – Finding Talent Your Competitors Overlook," available on Amazon.


  • First of all Tim, I must commend you for correctly using the word, “pumps” in a sentence that didn’t have anything to do with fists, gasoline, or Hans and Frans. You continue to surprise me – mostly in a good way. 🙂

    Now about the bonus money. I agree that a focus on what will sustain retention is critical in this hot job market. On the other hand, I think it’s important to keep those highly-sought-after-for now egos in check. If an employee felt the compensation was acceptable enough to take the job in the first place, then personally I think they should be happy with any bonus. And if they’re not? Find another opportunity (which is I guess why your candidate got back in touch)!

    That’s my opinion, but I may be being swayed by the lure of the pump. Looking forward to hearing more opinions on this topic!

  • Gwen – I am not impressed with any bonus that has a range of 1%-2%. It’s almost not worth it on multiple fronts. It kills morale, de-motivates the entire team and almost becomes a joke about the organization and how little they value their employees. It’s akin to Clark Griswold being awarded the now famous “jelly-of-the-month Christmas bonus. I knew you would have an opinion on this and I hope others chime in as well 🙂

  • Hello Tim & Gwen,

    I tend to agree with Tim that 1%-2% bonus range is a bit weak for the current market; however I also think that compensation and bonus packages are all relative to where the employee is in their professional and personal lives. For instance, health care may be important to an employee with dependents, but bringing in the cash could be important to those with no dependents and who value money highly.

    In this market, I tend to recommend that if a consultant wants to rake in as much money as possible, find an engagement with an hourly rate and no benefits (as opposed to salaried or benched consulting positions). Ask for the cost of benefits or bonus to be added to the hourly rate. If one can get their hourly rate to a high level (high, to them, that is!), then benefits/bonuses are a moot point.

  • Cassie – Thanks for your comment. Providing a bonus plan is intended to drive perfomance and reward employees for getting the job done. I’m sorry – a 1% – 2% bonus sends the wrong message about the employees value equation.

    I simply don’t get it.

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