The popularity of the holiday bonus continues to decline, according to new information from Hewitt Associates, as companies shift their practices toward variable pay plans. According to Hewitt, 66% of companies will not award holiday bonuses this year, while 80% are currently offering a variable pay program (performance-based awards that must be re-earned annually). "Variable pay plans, as opposed to holiday bonuses, clearly connect employees to company performance", says Ken Abosch, a consulting business leader for Hewitt.
Other findings from the Hewitt study, which examined the practices of more than 300 organizations:
- Of the 34% who will offer a holiday bonus program in 2006, awards will take the following forms:
- 39% cash
- 37% retailer gift certificates
- 27% gifts of food (e.g., turkey or ham)
- Over half (52%) have never offered a holiday bonus
- 14% of the organizations studied have discontinued their holiday bonuses initiatives, giving the following reasons (as a % of this group):
- 61% cost
- 35% employees did not value
- 33% entitlement issues
- 21% the development of pay-for-performance programs
See November 27 post on the topic of holiday bonuses for additional information.
Hewitt's connection of Christmas gifts, such as a turkey, with performance related pay is bit strained and not suggested by the survey, per se.
The Christmas gift is gesture of good will and can be a token amount.
If this connection is valid, then may be employees should ask for pay when they donate blood or do volunteer work on the company's behalf.
Posted by: Frank Giancola | December 27, 2006 at 10:38 AM