Cash crisis

The Year of the Dragon kicked off with a bittersweet note for Chinese workers who got their anticipated week-long holiday but had to resign themselves to a slimmer year-end bonus from their company.

Nian zhong jiang (year end bonus) quickly became a hot topic on the popular microblogging service Sina Weibo, with millions of Internet users venting their discontent in defiance of the usual contract pact that forbids the public discussion of salaries and bonuses.

Boom time for bonuses?

While the obscenely high bonuses received by some Western executives have recently heated up foreign online forums, Chinese Web users are complaining about a year-end bonus that made 2012's Spring Festival less auspicious than expected.

 "Every employee was upset after we received this year-end bonus… the increase was only 22.76 yuan compared to last year. It's really disgusting!" wrote angry Web user Li Xia Lee on Weibo.

Yi Yi Yoo was also disappointed: "The end of year bonus is too low! My company is really evil!" Another Web user seemed resigned to the fact that year-end bonuses might never be as generous as before. "Year-end awards and salary increases are bad news. The only sensible thing is to expect stability," wrote microblogger Qiqi.

Other Web users complained about getting their bonus upon their return to work after Chinese New Year, a celebration that involves a lot of expense, from traveling to gifts for the family.

Entrepreneurs and HR managers in general were less open to comment on the bonus situation online, but one who did sounded more optimistic: "I gave the year-end bonus to my employees ahead of schedule.

A girl cried because she was surprised to find over 100,000 yuan (US$15,813) in her envelope, more than she expected. The HR director secretly told me that the girl had received much less than her colleagues," said Yu Jinyong, the self-claimed investor and a controversial Weibo VIP user.

Others posted the amounts allegedly distributed by big companies: Volkswagen: 27 month's salary (a VW employee confirmed this was so, but only for assembly line workers); Beijing Mercedes Benz: two to three months salary; CCTV: three to five months salary; BYD [Chinese car brand Bi Ya Di]: no bonus.

New challenges

Some young Chinese entrepreneurs are trying to break away from the informal and emotional style of management to set up qualitative systems to reward performance.

 "My father treated employees as family members in recognition of their longtime support," said Wang Jie, a 26-year-old millionaire who owns a firm producing magnets and batteries in Zhejiang Province. Wang has a master's degree in management from the UK and took over the company and its 300 staff last year. "When business expanded, my father gave the same bonus to all employees," said Wang.

"I believe bonuses should be distributed according to performance. Most people, especially young employees, agree that it's fairer, healthier and more effective," he said. "Salary will always be more transparent and objective than bonuses. I can't deny personal preference can get in the way. There are some employees that I enjoy rewarding over others. It's human nature, right?"

The economic crisis shook up business, so Wang decided to cut and withhold bonuses to save cash and outlast the slump. "Most employees complained and they're calling me stingy in private. But we don't know what might happen this year. Cutting bonuses is better than cutting people," Wang said.

If bosses can be stingy, some employees are not ashamed of cashing in, even if they plan to quit. "I planned to resign in the December. But everyone said hold on until after I got my bonus," said Cicy Hu, a nurse at a Beijing maternity hospital. Hu quit after Spring Festival last year. "I felt guilty and my boss was angry but I got what I wanted. It's a reasonable career move," said Hu.

Foreigners lose out

"I got a leg of Chinese ham and a bottle of yellow wine this year," wrote a foreign Web user named Juan on a Shanghai expat blog. "Sometimes they don't include foreigners in the whole [New Year] bonus game," replied another nicknamed txaggie07.

Whereas many foreign companies have an appraisal system and reward employees according to performance regardless of nationality, many Chinese companies don't include foreign staff in the bonus system. The five foreigners who were interviewed requested anonymity, explaining they signed contracts that forbid any discussion of salary.

"My company says we [foreign employees] aren't entitled to the bonus because our salaries are worth two or three times the wage of a Chinese employee," said a Spanish woman who works for a State-run Chinese company.

"It's a fair point, but I can't say for sure because I have no idea how much a Chinese employee earns," she added. "But we also know there is no appraisal system; we never get feedback, the bonus attribution seems quite arbitrary. Furthermore, Chinese employees have some sort of permanent work contract, so even if they're incompetent it's hard for them to be fired," she said.

An American architect who works for a Chinese studio in Beijing complained about his 3,000 yuan bonus. "The company dropped year-end bonuses down to half; Chinese employees used to get three times their salary," he said. The company justified it by saying it had won fewer projects this year due to the financial crisis.

"I was praised as employee of the month a couple of times for which I was promised an iPad; I never received it and the bonus doesn't pay for one," he added.