Written by Tory Waldron
December 3, 2018
‘Tis the season for holiday bonuses!
Maybe your organization can’t afford to distribute $100,000 holiday bonuses like Hilcorp, but it’s still a great time of year to let your employees know how much you value their hard work (and how much you’d like for them to stay, particularly in a competitive War for Talent economy). But, there is a fine line; an initiative that is meant to foster goodwill can quickly turn into an insult if not navigated carefully.
Read on to learn about holiday bonuses, and five ways to present them to your workers in the right way.
Holiday bonuses range from small gifts – cash, bottles of wine – to one months salary. The amount is usually dictated by the organization's traditional practices in previous years, or by the growth of the company throughout the year.
A holiday bonus is typically independent of an end-of-year bonus. An end-of-year bonus typically involves a “profit share,” where a portion of the company’s profits are set aside and then distributed evenly throughout the staff. In order to avoid confusion, many companies dole out the holiday bonus in late December and the end-of-year bonus in January of the following year.
Holiday bonuses are nice, but what if your company cannot afford to give one?
There are two schools of thought on holiday bonus distribution. It is up to your organization to decide which makes the most sense:
Regardless of which method your company chooses, it is imperative to make sure your company is consistent with a strategy each year. If your holiday bonuses were performance-based last year, they should follow that same trend this year.
Whether you choose to assign performance-based bonuses, or evenly split the pool among workers, all employees should be included. Don’t let your four-month intern, part-time, contract, or temp worker feel left out just because they aren’t full-time salaried employees. If you end up wanting to hire them down the road, they may be less inclined to join your company based on this unfair treatment.
Giving out the same bonus amount year after year, particularly if the company has experienced growth, can feel insulting to workers. Do your best to continue to raise the bonus amount each year for workers; it’s an easy way for them to feel more valued.
Harness the power of pay transparency by holding a company meeting (ideally in early December), explaining your company’s holiday bonus methodology. Don’t forget to verbally thank your employees for all of their hard work this year.
Download our white paper and learn how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.