Table 4.
Differences in considerations to determine annual bonus pool allocation.
| No. | P/C | Top-down outcome-based | Bottom-up target-based |
|---|---|---|---|
| 1 | Pros | Require alignment to the corporate financial performance | Easier to be managed |
| 2 | Pool allocations will be disbursed based on contributions | Higher control due to derivative from the percentage of EAT | |
| 3 | Key performance index (KPI) driven | ||
| 4 | More transparency | ||
| 5 | Cons | Higher volatile the amount of pool | Lowering the opportunity to optimise fixed cost |
| 6 | Require to reconcile between HR and finance | Require strong alignment to KPI | |
| 7 | Unilateral |