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I think you're right on the money with your comment... "many employers try to accomplish too many things with the year-end award."

Across the board, companies lump together multiple objectives and goals into a common program with a bad mash-up of objectives and criteria. Employees at best are confused and at worst looking for work elsewhere.

A holiday "gift" is a thank you for being part of the "family." This is an emotionally charged experience rather than a "bonus" which is a transactional or business focused event. Employers need to look at their overall goals as an organization and develop a strategy that addresses their employee's emotional AND transactional needs/wants. Compensation and goal-based incentives are transactional. Holiday gifts and recognition are emotional. Both are important but when they are packaged as a single event they are not simply ineffective they are actually damaging. A company would be better off doing nothing.

I agree that some employers try to do too much with holiday bonuses. I think that 1) They should be completely seperate from performance reward plans. Whether you are talking about individual reward plans, or group bonuses based on an available pool that was generated due to great business performance, call these performance reward plans, don't call them holiday bonus plans just because they fall at the holiday time. 2) Holiday gift plans should represent a "thanks for your hard work all year and we care about you too" message, 3) They should be equal across the board (not more expensive for execs, etc.) - as one comment said, it's about being "in the family", and 4) If you decide to have a holiday gift program, do it whether profits are up or down. If you don't have a lot of cash on hand, you can still do something meaningful for the employees to represent the above-referenced messages. Just get creative!
Great blog, Ann! Informative and engaging!

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About The Author

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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