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The Do's and Don'ts of Holiday Bonuses

The Do's and Don'ts of Holiday Bonuses

The holiday season has arrived, and businesses large and small are making decisions about their holiday bonuses to employees. This tradition can be tricky to navigate, especially if you're a small business without too much cash on hand or you're still shaping your company culture. To come to the right choice for you and your individual business let's start off by stepping back and considering the most basic choice first: deciding whether to even give out holiday bonuses or not. Proponents of holiday bonuses say they can make employees feel appreciated as well as incentivize performance and improve morale. Detractors argue that they create a sense of entitlement in your workforce and encourage greed. If you do choose to go ahead with a bonus a few do's and don'ts can make planning this task easier and executing it smoother.

Do's

Consider how much money you have to spend

Step one is figuring out how much you have to spend total on your employees. Along with the number of employees you have, it will help you determine the size of the bonus you can give. Even if you don't have much to spend, you can still find thoughtful, useful gifts employees will appreciate.

Decide between performance based vs equal

Once you've figured out what kind of cash you have to work with, the next decision is whether to distribute it equally or based on how well your individual workers did (or didn't) perform. Both sides of this argument have passionate advocates, and it comes down to whether you want everyone to feel valued or whether you want to reward your top performers and motivate your low performers. Bear in mind performance-based bonuses will take more time to plan because you'll have to figure out how to determine the different amounts and explain to your workers why some people got more than others.

If you opt for a gift, make it thoughtful and practical

Depending on your company culture and available money you might decide to go with a gift instead of cold, hard cash. Whatever you choose, make sure it's something that's useful to your workers. Some good options are gift cards to grocery stores or general retailers, fleece blankets or movie tickets. Avoid going with a company branded item and think about what you would appreciate receiving if you were in their shoes.  

Don'ts

Give something that could be inappropriate or misinterpreted

Giving scotch to recovering alcoholics, candy to diabetics, or turkeys to vegans turns a well-intentioned gift into an impersonal inconvenience. It can get even trickier if you decide to give all the people on your team different gifts. In that case you'll have to make sure you spend the same amount of money on everyone and make sure it's not too personal. Clothing, jewelry and perfume are a few examples that cross the line.

Be cheap

This defeats the whole point of gift-giving because employees can feel more slighted than if they'd received nothing. A useless trinket that will break in a few months or a gift card with only a few dollars on it will just encourage gossip and resentment among your team.

Hide how the company is doing

There's no reason to spend money you don't have to keep up appearances. You're not obligated to go into the red just to impress your team! If your bonus won't be as extravagant as the one last year or you can't afford one at all let people know well ahead of time what to expect.  

If a bonus isn't in the financial cards at all for your company you can still give your employees intangible gifts, like paid time off. If all else fails, you can always fall back on a handwritten note expressing your gratitude for their hard work throughout the year. After all, expressing your appreciation is what really matters.

Posted: 12/10/2014 4:34:21 PM by | with 0 comments