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Bad managers are still getting bonuses

A third of 'underperforming' managers got a salary booster in the last year.

by Rachel Savage
Last Updated: 03 Jun 2015

Life’s alright if you’re a British manager. Your pay is probably rising above inflation and you might have even got a bonus while missing targets.

Nearly a third of ‘underperforming’ managers were handed a bonus in the last 12 months, rising to 45% for senior managers and directors, according to research by the Chartered Management Institute.

Meanwhile, 48% managers who merely ‘met expectations’ got their salary plumped up, while only 55% of those who went above and beyond got something extra. So much for ‘performance-related pay’.

The survey of 317 organisations, which employ 72,206 people between them, also found managers’ salaries increased by 3% in the last year, up from 2.7% the in 2014. That’s well above the 1.9% wage growth across the whole UK in the first three months of this year, the most recent official statistic. Meanwhile, the average bonus was £8,836, while directors bagged themselves payouts averaging £44,687.

‘Unfortunately, it seems to be a lot easier to reward poor performance than to face the awkwardness of having difficult conversations with underperforming staff,’ CMI chief executive Ann Francke said. ‘Organisations and their employees will only benefit from a culture in which pay closely reflects performance.’

‘There is often a culture of rewarding past glories,’ said Mark Crail, content director at XpertHR, which conducted the research with the CMI. ‘The biggest and most significant indicator of whether someone will get a bonus this year is whether or not they got one last year. The longer that goes on, the more people come to rely on the money and the harder it is to stop paying it.’

It’s not just banks, then, that are soaked in a culture where bonuses are lavished on those that don’t necessarily deserve them – although these ones aren’t of the multimillion pound variety.

Meet CMI chief executive Ann Francke at MT Live London on June 25. See the full speaker list and book tickets here.

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