COVID-19 dampens employers’ plan to reward workers

- by Marlon Madden December 10, 2020

Many workers in Barbados who are used to getting an end-of-year bonus could be ending this year without one due to reduced profitability in companies brought on by the COVID-19 pandemic.

However, officials are cautioning workers to understand the situation and at the same time, urging employers to still reward staff wherever possible, even if with other gestures.

A cursory check with some members of the private sector revealed that while a bonus was still a possibility for some this December, others said it was not something on the cards due to a dramatic reduction in business throughout this year.

For most companies, a bonus is discretionary and is paid to staff at the end of a calendar year after the company records a profit. The amount of bonus would vary and is to reward staff for their performance throughout the past year.

However, since the COVID-19 pandemic started to affect the island in mid-March, most companies have had to alter their operation by downsizing, due to a major falloff in revenue.

Executive Director of the Barbados Chamber of Commerce and Industry Misha Lobban-Clarke, who confirmed the development, told Barbados TODAY the two-month national shutdown earlier this year and the ongoing pandemic have significantly impacted businesses in all sectors.
In fact, she said firms have reported that they were at this stage focused on mere survival and keeping staff employed.

“The two-month national shutdown and the prolonged COVID-19 pandemic have significantly impacted businesses. This has been evident in some business closures, while others have had to downsize their operations. Businesses are now focusing on survival and recovery while keeping staff employed,” she said.

“Generally, bonuses are paid from profits and it is not expected that most companies that are currently experiencing severe economic trauma will be in a position to pay bonuses in 2020,” she added.

However, Lobban-Clarke said based on feedback from some BCCI members, even in the current crisis, some firms will still make an effort to show a “tangible recognition” to employees, although this may not necessarily be in the form of a bonus.

Many companies also celebrate their staff at the end of the year by throwing a staff party. Barbados TODAY understands that some businesses will also be scaling back on this type of activity.

Several companies have also already reported that they would not be paying a year-end dividend to shareholders as a result of the severe hit to their bottom-line this year.

President of the Human Resources Management Association of Barbados (HRMAB) Brittany Brathwaite said she would not be surprised if firms did not pay staff a bonus for 2020, given the kind of year it was.

“If we look at the wider economic climate, I don’t think it would be prudent for anybody to expect bonuses unless you are in an industry that really went unscathed,” said Brathwaite.

“It is also important to remember that in many cases, unless you have a guaranteed bonus in your contract or in some way there is a tie to your performance and it is guaranteed, then in many cases bonus is discretionary. So with adequate notice an employer simply has to say it will not be provided this year,” she explained.

The HR consultant said if this was the case, employees should be understanding “particularly where they are still able to earn a wage or salary”.

Also expressing similar thoughts was Executive Director of the Barbados Employers’ Confederation (BEC) Sheena Mayers-Granville, who told Barbados TODAY she would encourage employers to continue to reward their employees where possible, but for workers to understand if the company was unable to.

“We encourage employers to do as they always do – where they have the financial wherewithal they do reward staff, and where they are unable to then, of course, they can’t. This is not going to be unique to if you are under a COVID-19 circumstance or not. This is what generally obtains in the private sector. The payment of bonuses would be based on the performance of the company,” she pointed out.

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