Moroccan Firms Reassess Performance Bonuses Amid COVID-19 Cash Flow Concerns

"Any structured company has a variable compensation plan conditioned by performance criteria. All of this is discussed in advance. With the crisis, all the objectives that have been set will ultimately become obsolete. In reality, the majority of companies will not risk distributing bonuses for the simple reason of maintaining the same level of cash flow that will allow them to meet their commitments to third parties," he said in an interview with Aujoud’hui Le Maroc. The manager provided details on the main conclusions drawn from a study carried out by LMS ORH and Willis Towers Watson on salary compensation in these times of Covid-19.

"Beyond the figures that will feed the guidelines on any pay rises, there are also things that are being done with regard to compensation schemes," he explained. He pointed out that telework, which many companies have adopted during this health crisis, raises many questions, particularly from a legal standpoint, but also very practical aspects. "The standard salary package of an employee in Morocco is made up of certain allowances such as transportation and baskets. These items have become obsolete with confinement. At the same time, other types of expenses have emerged when working from home (a good internet connection, laptops, etc.)," he said.

According to the manager, 2021 will be a year of recovery. "However, we will have to focus on systems that will not involve companies in immutable commitments. The salary increase will not come back right away, on the other hand the bonuses have this natural flexibility that favors their distribution and this according to the results of the company. Variable compensation will be the subject of 2021 due to its flexibility," he indicated. For Mr. Dahbi, this direct dependence between what is distributed and the economic and financial health of the company must be taken into account.