Screw The Bonus
By the end of May, all of the drama with Bert and Cthulhu is sorted out, and I’m back to the relative normalcy of complete hell.
The first thing I realize is that because of all of the energy I’ve spent on fixing The Bert Problem, I’m behind on my MBOs.
I start digging into one of them — actually the same one that Cthulhu and I had a fight over just a couple of weeks prior, this inventory management reach goal called KEY CONFIGURATION DETAILS. Of course I’m home, it’s eight PM on a weeknight, and I want to be doing anything but work.
The prospect of opening up excel and trudging through this task makes me think about spilling a box of thumbtacks into my open mouth and swallowing for some reason. Oh yeah. Maybe because that’s about how painful it seems.
In a flash of insight, I wonder exactly what will happen if I don’t do it.
This leads me down the following thought trail:
- The majority of my bonuses are actually guaranteed. We (employees) forget this on a day-to-day basis because our managers rarely remind us. They threaten us with “loss of bonus” when, actually, it’s really only “loss of partial bonus.”
- My company automatically gives me a huge 401(k) dump which is, somewhat surprisingly, not tied to performance. In addition, I have a 20% bonus, and half of that is guaranteed.
- It’s only this last 10% that is up to Cthulhu’s discretion.
Is it worth it? I sit down and do the math.
- 10% of my 88K base salary is 8.8K.
- At the marginal tax rates, I’m taking home perhaps $6,350.
- The question then becomes: How much time am I putting in to earn this money? What’s my hourly rate?
- I estimated I spent about 10 hours a week on MBO goals. I’d already done this for 5 months this year, with 7 remaining. So let’s consider just the remaining 7 months.
- 7*4.5=31.5 weeks, * 10 hours per week, 310 hours.
- What’s the hourly rate on 310 hours of work for 6.35K?
- Only $20 an hour. It seems like more because you get paid in a lump sum at the end of the year, but in actuality, your wage isn’t that great.
Consider my mind blown.
I have two options at this juncture of realization.
a) Complete the MBOs anyway because it might make my 1:1s with Cthulhu go a little better, and make a bit of money in the process.
b) Accept that $20 an hour is far below my hourly pay rate and voluntarily decline to complete the objectives, on the rationale that it’s not a good deal for me. After all, the hours spent working on my MBOs are actually some of the worst hours of the day worked because I have to work on them at home — in my “free” time — in order to complete them. If anything, I should be getting paid extra to complete these tasks. Instead, I’m earning something less than half of my regular hourly rate.
I never would have done the math like this without having read Your Money or Your Life. The book encourages people to determine their “real hourly wage,” and I just sort of modified the idea to apply to my hourly wage attached to, specifically, my bonus.
While $20 an hour is nothing to scoff at — I’ve earned much less at earlier points in my life, and been very happy to make that amount of money — in my current situation, it didn’t make sense. I needed time at night to unplug from work, to be myself, to live my own life.
I chose option b.