Small Business Owner’s Guideto the Holiday Bonus
Last Updated: Dec 11, 2017
Is your company giving out holiday bonuses this year? Did they give them last year? Find out what other businesses are doing and get tips on how to give (or not give) holiday bonuses without causing bad feelings among your employees.
The 1989 movie National Lampoon’s Christmas Vacation shows us in a very funny yet poignant way just how holiday bonuses and the expectation thereof can be viewed by employees.
It seems character Clark Griswold puts a $7500 deposit on a family swimming pool based on an anticipated Christmas bonus. For 17 years, Griswold has received a holiday bonus. When Griswold receives a membership to the Jelly-of-the-Month Club instead, he snaps, and Cousin Eddie kidnaps boss Frank Shirley for retribution. When the boss is brought to Griswold’s home and sees how the suspension of the company bonus has affected the “little man,” Shirley tells Griswold, “Whatever you got last year, add 20%.” The boss’s wife learns of the goings on, and she contemptibly exclaims to her husband, “Of all the cheap lousy ways to save a buck!”
The Holiday bonus today
Fast forward to now and you’d be hard pressed to find an employee working with the same company for 17 years let alone a company that has given their employees bonuses for the same number of years. Small businesses, in particular are vulnerable to changes in the economy and consumer buying pattern . According to the findings of a Bank of America survey, many small businesses are still keeping their belts pulled tight when it comes to holiday perks. The survey found that only 35% of small businesses say they’ll give a cash bonus this year. That percentage is up slightly from 32% last year, but is still far below the 52% that gave bonuses in 2015.The number of small businesses who say they will give no employee holiday perks at all has fallen to 24%, down 45 from last year.
What kind of bonuses are employers giving?
Survey 25 different small businesses and you’ll most likely find 25 different company policies on holiday bonus giving. When we surveyed Business Know-How readers this last Fall, we found that 52% of businesses that responded plan to give employees a cash bonus this year. Some small businesses plan to give a flat dollar amount to each employee. That flat amount varies by the industry and profitability of the businesses, but in our survey, the typical amounts ranged from $100 to $250. A survey by Accounting Principles that included both big and small businesses, shows that fewer employers plan to give bonuses this year, but on the average those employers that will be giving bonuses plan to give cash bonuses that are 66% higher this year than last.
In other cases, the amount is based on each employee’s base salary. The actual percentages, again, vary significantly from business to business. In the Business Know-How survey we found some employers were giving one to two weeks salary as a bonus.
Some companies give performance-based bonuses instead of holiday bonuses. In these pay-for-performance programs, employers tie bonuses to performance as opposed to the holidays; thus helping to meet company’s goals and objectives. In other words, “Have a Productive Christmas” and an “Improved Bottom-line in the New Year.”
The Business Know-How survey results show that 43% of small businesses will give their employees non-cash gifts or other perks during the holidays this year. The perks mentioned include extra time off, flexible hours, a purchased gift and holiday parties.
Tips for Giving Holiday Bonuses
First, can you afford to give a bonus? During a 25-year span, one employer changed their yearly bonus offerings depending on each year’s earnings and profits. During lucrative years, employees enjoyed lavish holiday parties with high-priced raffle prizes and generous cash bonuses. In lean times, there were no cash bonuses, no party and no prizes.
If your company has without fail given holiday bonuses for a good number of years, but will be unable to the next, try to let employees know as early in the year as possible. Many employees count on that bonus check and factor it into their household budget as part of their yearly earnings.
Choose bonus amounts carefully and fairly. When determining bonus amounts, think “fair and equitable distribution.” In other words, bonuses should be consistent, given out uniformly and on an unbiased basis. Care should be taken that no worker feels unfairly shortchanged.
Include all workers. If at all possible, be sure that everyone working at your place of employment is recognized in some way during the holiday season. One four-month-long temp worker was crestfallen when the week-long employee in the cubicle next store received a bonus and she didn’t.
Give the gift of time. If your company can’t afford to give cash or gift bonuses this year, consider giving the gift of time — paid time off, that is. Time off with family and friends is something that virtually everyone could use more of. Employees will appreciate an extra day off or two to relax during the year-end holidays after all their hard work during the work year.
Finally, keep in mind this comment from one of the employers who responded to our survey:
“If you take care of the people that take care of you throughout the year, you only stand to benefit as people do much more when they are appreciated and tend to remain loyal.“
Copyright 2017, Attard Communications, Inc.
Business Know-How/Attard Communications, Inc. is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.