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Is it Time to Rethink Your Holiday Bonuses?

Many employers feel obligated to hand out holiday bonuses. If you have been distributing such checks for years, without regard to merit or longevity, maybe it is time to rethink this practice.

Merit-based rewards

Citing economic uncertainties or philosophical changes, some employers have done away with holiday bonuses altogether. This is an option, of course, but a better one may be to replace your across-the-board holiday bonuses with a merit-based program that rewards those who deserve extra recognition.

To do that, you must first give employees fair warning that you plan to discontinue issuing blanket holiday bonuses. Your staff is, after all, accustomed to a year-end bonus and may be counting on it.

Then announce a plan based on individual or team accomplishments. It must hinge on measurable outcomes. For example, a manufacturer could communicate that everyone in a given plant will receive a 10 percent bonus if that location meets certain production levels. Give the reward within a few days to firmly fix the achievement to the goal. If you do not, it will lose its luster.

Gift cards, etc.

Another option is to give your department heads a supply of gift cards in various denominations to hand out for exemplary performance. If a shipping clerk stays late every night for two weeks to make sure rush jobs get out on time during a peak period, for example, it may merit a $20 gift card.

Remember, too, that not all rewards must be monetary. A preferred parking place, a more flexible schedule or a special celebratory lunch are all ways to recognize smaller, but noteworthy, accomplishments. Even a mention in the company newsletter, an announcement during departmental meetings, or a photo on a bulletin board can do a lot to make merit bonuses sought-after rewards.

Specific ideas

Whatever bonus plan you choose, make sure it is fair, impartial, and open to all employees and that it includes public recognition as well as a handshake. Please contact our firm for specific ideas about how your organization could improve its bonus program.

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