Layoffs are a wrenching experience for the corporation as well as the victims. It loses good people that way. And, as many technology firms discovered in the past year, it's not easy to get those people back when the curve heads upward. Cutting salaries produces resentment and sullen employees.

One solution is the bonus. In Japan, engineers get hefty twice yearly bonuses that the company bases on corporate performance that year. Over the years, a majority of our American engineering respondents have told us they've received no bonuses. But we are detecting some shifts.

In our 1993 survey, 64 percent didn't get a bonus. That drifted down to 58 percent in 1994, and 53 percent in 1995. Now, we're nearly at the halfway point, 51 percent.

New compensation techniques

And the bonuses aren't necessarily small, either. More than 8 percent saw bonuses of 10 percent of their base salary.

Is the compensation picture c hanging?

Yes, says Charles Peck, who tracks compensation trends for The Conference Board in New York, an industry organization. "This is in line with what's going on throughout industry."

At one time, companies reserved bonuses for top executives and field sales people. "Now bonuses are being extended to employees not previously eligible."

Peck explains that corporations use bonuses as a form of cost control. "Salary raises are like peanut butter, spread thinly over a large amount of area." Bonuses enable companies to reward more selectively.

The AEA's Benchmark Survey of more than 600 electronics companies found that 78 percent offered bonus/incentive programs for executives and 68 percent had programs for exempt employees.

Some 86 AEA companies offered exempt professional staff bonuses based on project performance, 82 offered them based on department/division performance and 201 based their bonuses on discretionary assessment.

So bonus programs are in place at a number of engineering employers' workplaces.

Our survey offers a mixed picture. For 77 percent of the EEs and managers in our survey, the paycheck is derived from a fixed salary, agreed on by employer and engineer. No change there.

But 13 percent are part of pay-for-performance programs at their companies. As a vice president of engineering explained in last year's survey, pay for performance "provides me and my team the ability to receive additional compensation based on our contribution to the success of the company."

Such plans vary from company to company. At some locations, 100 percent of employees' salaries can be affected by meeting preset goals. At other sites, a lower percentage is tied to meeting individual, team or company wide goals.

In a good year, it's a win-win situation, where the engineer can reap some benefits from a successful launch. In a bad year, "poor performance on a badly managed program could result in a 50 percent pay cut for a highly paid engineer," according to on e 1995 respondent.

It is risky. A 1995 survey of 3,300 companies by the American Compensation Association found that 17 percent actually paid out bonuses last year. Many others may have incentive structures but didn't meet a goal.

EEs last year were irritated by arbitrary criteria in determining bonuses. If companies want to keep engineers happy, readers told us, they'd better establish clear, attainable goals-and not wiggle out of paying if those goals are met.

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