6 of 10 companies won’t pay year-end bonuses to employees

Household economy is likely to be affected by domestic companies, which are tightening belts amidst sluggish economy.

A survey of 349 companies showed that six out of 10 domestic corporations (63.9 percent) would not give year-end bonuses to employees this year, said the online job-searching site Saramin on Friday. Among the surveyed companies, 15.7 percent provided their employees with bonuses last year.

When asked the reason for not giving bonus, 31.8 percent of the companies said, "Annual salary system includes bonus," followed by "Company’s financial conditions are not good (30.5 percent)," "Economy is not in good shape (25.6 percent)," and "Employees didn’t meet the target performance (19.7 percent)."

Instead of bonus payment, 60.5 percent of the surveyed businesses said they have a plan for "company dinner and year-end party (47.4 percent)" to boost morale of employees at the end of the year. Some companies encourage employees to use annual paid vacation (22.2 percent) or provide gift sets (20 percent) as a substitute for bonus. Average year-end bonus amount is tallied at 2.09 million won per person.

Meanwhile, 47 percent of the companies surveyed by Saramin answered the company’s performance was lower than the target for this year. For reasons behind poor performance, 43.9 percent of the companies said "low domestic demand," while 14 percent answered "lack of liquidity such as surplus fund," and 8.5 percent responded "worsening environment for export."