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Part 2 | Building a Bonus Budget by Business Type in Vietnam
“When a subsidiary cannot determine its bonus pool based on revenue or profit, what metrics should be used instead?”
In Part 1, based on findings from ICONIC’s “Comprehensive Report on Salary Increase & Bonus Rates in Vietnam 2026” published on January 6, we analyzed the key market trends in salary and bonus adjustments across regions, industries, and business types. [Read here]
This second part focuses on how to design and manage a bonus budget, taking into account each organization’s business type and development stage.
1. When the Subsidiary Can Control Revenue and Profit
For subsidiaries in Vietnam that have operational autonomy over:
- Revenue growth
- Cost management
- Profit generation
the bonus pool is typically determined by financial indicators such as:
- Achievement of revenue or profit targets
- Year-on-year growth rate
- Actual performance against annual plans or forecasts.
However, using purely financial results as the basis for bonus calculation does not always capture the team’s actual contribution - particularly during growth or investment phases, when temporary losses may occur as part of long-term expansion efforts.
In such cases, it is advisable to establish the bonus budget around Key Operating Metrics (KOMs), such as:
- Gross Merchandise Value (GMV)
- Number of active users or clients
- Volume of new orders or projects
- Market share growth
This approach links bonuses directly to strategic objectives, ensuring fairness and accurately reflecting team contributions during different stages of corporate development.
2. When the Subsidiary Plays a Specialized Role Within the Corporate Group
Many entities in Vietnam serve as specialized units within a larger group’s value chain — for example:
- Export-focused manufacturing plants
- Offshore software development centers
- Technical design or R&D hubs
In these cases, the subsidiary’s standalone financial results may not fully represent its internal contribution to the group’s broader objectives.
Accordingly, the bonus pool should be structured around role-based performance indicators, such as:
- Operational utilization or production capacity,
- Compliance with schedule and quality standards,
- Efficiency in coordination with headquarters or other group units.
A best practice applied by many organizations is to align the bonus criteria for subsidiaries with the same key metrics used by the parent company to evaluate the local General Director.
This alignment ensures consistency in performance communication and reinforces the strategic connection between group-level objectives and local execution.
3. When Bonus Allocation Should Be Decoupled from Short-Term Financial Results
For businesses in sectors with long project cycles or delayed profit recognition — such as real estate or infrastructure development — many companies implement a Fixed Bonus Scheme, characterized by:
- A pre-defined number of fixed bonus months
- Independence from short-term profit fluctuations
- Adjustments only based on individual performance ratings
This model provides both budget stability and predictability, enabling more proactive financial planning.
Practical implementation often follows two steps:
- Benchmark against average bonus levels in the same industry or among direct competitors.
- Review project progress and achievements throughout the year to determine a baseline bonus amount, which can then be modified based on individual performance results.
This methodology is particularly suitable for organizations in long-cycle industries, where financial results do not fully capture performance within a single fiscal yea
4. Conclusion: No Universal Formula - But a Clear and Consistent Logic Is Essential
There is no “one-size-fits-all” formula for determining a bonus pool.
What matters most is building a coherent management logic that accurately reflects:
- The business type and operational model of the subsidiary,
- The organizational maturity and development stage, and
- The medium- to long-term human capital strategy.
For organizations seeking updated, data-driven insights to guide strategic reward decisions, ICONIC recommends the Salary Increase & Bonus Report 2026. This detailed version provides segmented data by: 11+ regions, 14+ industries, Business types, and Job levels.
📍Coming Next: Part 3
Designing a Salary Increase Budget — Why It Demands a Different Logic from Bonuses
While bonuses reward short-term performance, salary adjustments have a long-term impact on cost structure and talent competitiveness.
In Part 3, ICONIC will analyze the key principles of building a balanced salary increase budget - one that optimizes costs, supports organizational effectiveness, and strengthens retention capabilities in 2026.
