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Middle Managers in the UAE See Compensation From Profit Share and Bonuses Fall


UAE : 15 March 2011

Middle management staff in the UAE has seen their remuneration that was distributed in bonuses and profit share fall by 9 percent from 2008 to last year, based on findings stated in the Global 50 Remuneration Planning Report. Towers Watson, an international company providing professional services, conducted the study and found that senior level management and those in lower levels experienced wage growth over the same time. Although lower level managers reported a wage increase of 2.3 percent, that amount is small in comparison to the 12.9 percent boost in the amount reported by senior level managers.

The report is formulated with a specific method of analysis that Towers Watson uses to assess compensation deemed to be ‘at risk,’ or not guaranteed. It was reported that middle management in the UAE were bringing home, on average, 16 percent of their base salary in profit share and bonuses throughout 2010. This is significantly lower than the 25 percent brought home in 2008. Senior level management, however, reported taking in an average of 48.9 percent of their base wages in profit share and bonuses, which is a significant increase from the 36 percent reported in 2008. Those working in lower management also saw in increase in the amount of ‘at risk’ compensation they received over the last two years. On average, those in lower management received 14.3 percent of their base salaries in profit share and bonuses, after only 12 percent reported in 2008. The trends seen in other GCC member states, such as Saudi Arabia, are similar.

Tower Watson’s Head of Operations (for Data Services EMEA) Anne Severeyns said that both profit share plans and bonuses are a vital part of the compensation package for employees. With variable pay options like these businesses have a better ability to control their costs, motivate performance and reward and retain talented key people. Severeyns stated that in the economic climate of today it is necessary for employers to have and use these tools of remuneration that can work within strictly laid out budgets while still allowing for the development of employees on all levels that are essential for success.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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