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I am due for bonus from my current employer "X" in the month of January 2013. This amount comprises of about 15% of my Annual Gross Pay (AGP) and is variable. I have a new offer in hand and the new company "Y" wants me to join in November 2012. I've already negotiated with Company "Y", which is a large and well-known company, and received an offer, so it is unlikely I can negotiate further. In comparison, company "X" is a much lesser known company (they work in a niche domain), but I have been working here for 7 years. I am planning to put down my papers, but would it be reasonable to ask my current employer to pay the bonus on a pro rata basis? If so, how can I put it across them in a polite way?

P.S: People who join "X" in the middle of the year get the bonus based on proportional period of time they have worked in that year, but I do not know the case for people who leave the company.

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    ... why would a company give a bonus which is paid out several months after you leave? Why would you think that you have no chance of negotiating with Y? – enderland Oct 3 '12 at 12:19
  • @enderland I already negotiated to the maximum extent possible and they have already sent the offer letter to me . Now it is difficult to change that . – Confused Oct 3 '12 at 12:28
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    I too would expect you to lose your bonus if you don't complete your year. In anticipation of losing your bonus, have you considered asking the company wanting you to start early whether they would be prepared to cover your loss in order that you can start before Jnauary? – Mark Booth Oct 3 '12 at 13:20
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I'd be stunned if how you ask makes any difference. If it's not in your contract that you get a prorated bonus payment on exit then you won't get one. If it is (against all odds) in your contract then you will.

After all, beyond keeping to the terms of a signed contract, what could possibly be in it for them?

The first year, it gives you a hint of things to come, puts you in a positive mood for the year ahead. The morale benefits are considered higher than the financial cost.

But in your last year, there is nothing for them. You're leaving. They don't care if your morale remains high. It's just a financial outgoing.

All that said, while I personally wouldn't bother, I guess you have nothing to lose by asking the question. Maybe something like "Just checking so that I know where I stand, financially: As I'll be leaving near the end of the year, will I be entitled to the annual bonus (or part thereof)?"

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    Just to add that the way you should have done this was to say to your new employer "if I join you in November I'll be missing out on a bonus. Can you make that bonus up to me?" – DJClayworth Oct 3 '12 at 13:21
  • +1 for simply checking the contract. Some employers will do this - if you worked 10 out of 12 months of the year before leaving, you could be said to have contributed almost a full year's worth of work towards that bonus (and would be entitled to up to that proportion of the full year's amount). If it's not in the contract, they might not be allowed to give it to you. – FrustratedWithFormsDesigner Oct 3 '12 at 14:59
  • Most often the annual bonus is intended to promote stability in their workforce, its not really about morale since not getting one or one that does not meet expectations has a more negative effect than a good bonus has positive. But it does make you think twice before jumping ship near years end when need for stability is highest. – IDrinkandIKnowThings Oct 3 '12 at 18:58
  • I worked at a company which had "profit sharing", which is basically a bonus, and was calculated via a formula based on the company's results for the year. The CFO was very explicit that you "must be present to win", which is to say if you're not still employed when the bonus is handed out then you don't get one. As pdr says, I suspect you'll discover this is the (unstated) policy at your employer. – aem Oct 4 '12 at 15:25
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Finance/Banking is an industry where most companies give their bonuses around the same time, so many employees change companies shortly thereafter. Very few people leave before getting their bonus. I've heard of getting paid for left-over sick days, but not a performance bonus.

There are a few points you could mention in your request:

  1. 7 years with a company is probably more than average in the tech world.
  2. You gave plenty of notice.
  3. You've been cooperative in helping the company make the transition (e.g. wrapped up projects, produced additional documentation, trained new programmer, etc.).

IMHO, if you haven't done all of these, you have no right to the bonus and you risk "burning the bridge" with this employer. You may be showing some guts by making this request, but it shows a lack understanding of how the business world works.

In some places in the US, if this were commission, they would have to pay it to you.

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Nope, because the bonus due is due after you leave.

The bonus is, among other things, an incentive to keep you around. If they payed out pro rata whenever someone left, they'd lose that incentive. In my line of work (software development), bonuses are sometimes offered as an incentive to get the project done on time. The bonus is thus conditional on two things; first, that the project is completed by deadline (completed having the meaning of "the client agrees that development is complete"), and second, that you are still employed as of when they pay the bonus.

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You worked in X for 7 years. If you have a look at what is written on your "performance review" papers from the previous year, you'll likely to find a fineprint at the bottom of the page saying "to receive this and that you must be employed by X and not be under a resignation notice at the payment date". In that case you may try to negotiate a join in bonus with Y, but you should have done this before accepting the offer.

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