In the bad times, such as financial crisis or recession within a company, the dilemmas about payment of employee bonuses and compensation is what supermarket chain has to face. Superado, one of the largest grocery retailers in Spain had encountered shape fall in recession. Its CEO, Luisa Fernandez was in the dilemma about whether to hand out bonuses to employees. To solve this question, this essay will firstly summarise the predicaments facing the supermarket chain concerning employee bonuses and compensation. Following this, it will discuss the effect of the payment of bonuses on the aspect of both employees and the company. After that, the effect of non-payment of bonuses and the responsibility of the company to pay the bonuses will be stated. Finally, it will draw a conclusion about whether to grant employee bonuses and compensation in bad times.
In conclusion, company always find it in the dilemma of whether to pay bonuses and compensation to employees in difficult times. There is a positive effect on paying bonuses to employees. As their needs and expectations are met and their hard works are rewarded, it is likely that they will be more committed, which results in better customer satisfaction towards the supermarket. That positive influence is beneficial to the company too. Also, the payment of bonuses and compensation help company for tax deduction, which can lower the expense of the company and improve the cash flow. However, to pay bonuses and compensation, considerable amount of cash flow will have to be prepared and spent, which burden the company. For supermarket chain, there are a lot of employees so that the payment of bonuses may significantly affect the cash flow of the company. The act of sending out bonuses will cause the drop on the company stock value. It is company’s responsibility to pay bonuses and when the non-payment of bonuses against the law, the illegal action will cause seriously finance and reputation loss for the company. Also, the non-payment of bonuses will for sure decrease the loyalty and commitment of the employees, while considerable amount of money could be saved. In short, grant employees bonuses and compensation in bad times is still a recommended way for company.