Terrible HR Tuesday – Bonus Letters

Feeling Bad

If you were lucky enough to have operated in the black in 2010, it’s probably just about bonus time for you – so I’d like to share a wonderful example of Terrible HR and bonus letters.

Bonus time is a very exciting time for employees, particularly when your bonus payout is strictly a calculation based on salary and target percentage – not tied to your actual performance. It’s a very easy calculation, and with only three different calculations based on the level of employee you are, it is very simple to identify who gets what payout. In this example…

Part of the payout process was to share the good news with each employee by sending a personalized letter to their home address. In the letter, it needed to indicate their personal information including base salary, grade level, and target percentage. Along with this information was the bonus payout calculation and earnings for each part of the calculation – an individualized summary of what exactly to expect in their bonus paycheck, a few days in advance of the check. Being that all of this information was included in one Excel spreadsheet, it’s very easy to create merge-letter documents for each scenario and then complete the task. Especially when you were working through a vendor.

Part of working with a vendor is to check their work when they send samples. In this case, six samples were sent – two samples in each of the three different target payout groups, to ensure that they pulled the correct fields and target details. As many of your know, samples are done because there are sometimes mistakes – it’s YOUR responsibility to catch them, that’s why the vendor sends them. Well, this HR professional was not very detail-orientated, so she simply signed-off on the letters without even reading the sample letters. Guess what? Over 800 letters were sent out with the incorrect target percentage number indicated in their letter – so their calculation and bonus amount didn’t match their letter or actual target number. Yeah, really.

Now mind you, since these were all mailed, not only was this an extremely embarrassing mistake for the HR professional, but it also ended up costing the company a lot of money – as those 800 letters all needed to be reprinted and mailed back to the employees. I can’t say this enough – taking time in the front-end to be detail-oriented, or at least pretending to be, will save you a ton of embarrassment. In this case, this HR professional did not only get “in trouble” from her manager and her boss’s boss, but she also lost the credibility of those 800 people and her peers. I know it’s usually not in the HR job description, but please pay attention to these types of details if you are reaching your employee population. Nothing sinks HR’s credibility as a function quicker, than these silly mistakes.

*Photo by Ben Heine