Sunday, December 20, 2015

Holiday Bonuses (Or Will They Ruin Your Christmas Vacation?)

It's that time of year, where trees are up, holiday music is playing, people are alternatively more upbeat and more cranky than any other month. It may be the overscheduling, or all the forced time with others, but it can lead to a stressful time. In many jobs, December is also a very busy time- it's time to wrap up the fiscal year, set budgets and goals for next year. It's also that time of year where you are expected to complete all your normal work, while also adjusting and covering for other's vacations or trying to squezze in your own. There is a silver-lining in all that: the Holiday Bonus.

One of the all-time best holiday movies (there is no room for debate on this issue) is National
Lampoon's Christmas Vacation. I was re-watching it a few weeks back, and I was struck that I had forgotten the whole premise that the movie is based on. If you haven't seen it recently, the crux is the holiday bonus- or the lack there of! In the 1989 movie, the main charector Clark Griswold, is waiting expectantly for his Christmas bonus. While you never know how much he is actually expecting, he is using it for a downpayment on an in-ground swimming pool. Sooo while I don't know how much that would be in the 1980's, I think we can surmise that he was expecting a fairly big 'pool' of cash to come his way. Hilarity ensues, as with all Chevy Chase movies and a string of unfortunate events occurs with the onset of his family coming to visit, as Chevy Chase loses sight of the meaing of Christmas. In summary, well-off head-of-household with good job, doesn't get bonus and can't afford a luxery his family was doing fine without. #firstworldproblems #80sclothesarethebest

In re-watching the movie, I was struck by the pre-great-recession idea of the Holiday Bonsus- and thought, do most folks even get holiday bonuses anymore? Is the Holiday Bonus it's own piece of nostalgia out there, gone by the wayside of other quaint 80's and 90's traditions like, matching outfits for Christmas cards and the overuse of AquaNet as a styling product?

The biggest sign to me that the Holiday bonus is (mostly) dead, is the complete lack of information nationally that I was able to find on it. The most reputable data source I located was a poll completed and featured by CNN Money in 2005. Yikes- not exactly current. At that time, about 60% of companies were reporting that they were not planning on giving a holiday bonus to their employees. I did find a lot more on the switch from holiday bonuses to performance based bonuses (or incentive based pay). Where as the spirit behind the Holiday Bonus was a way of thanking all employees (often equally) for their time throughout the year, incentive based pay is an increased compensation model based on the quality of work of that individual employee through the year.

According to the Society for Human Resource Management incentive pay is often performance based money due to the completeion of a short-term or long-term project or performance measure. A short-term performance incentive could be getting bonus after finishing a big project for your employeer that goes above/beyond your normal job expectations (overhauling the companies IT systems, for example...making it through a budget meeting without yelling at someone would not count...). A short-term annual performance outcome, may be based off of your sale numbers from throughout the year and could be an end of the year bonus. Some companies will also do retention bonuses, thus also finding a way to reward employees who have maitained time with the company, often 5 years and above. As in thanks for sticking with us all this time, and pleeeeze stick around another year!

In a survey completed in 2013, published in 2014, World at Work and Deloitte Consulting, found that 99% of the companies that they surveyed had some sort of short-term incentive plan. So while the holiday bonus may be on the outs, many companies are still offerring some form of incentive program. The research does show however, that this mainly impacts salaried employees, part-time or hourly employees were only receiving benefits from incentive plans or holiday bonuses between 50-55% of the time- significantly lower than the average for salaried employees which as previously mentioned was in the high 90%.

The research I found does seem to show that if your employeer has a good incentive based pay model, you could be receivng a bonus of around 5-10% of your annual salary as a low level employee, 10-15% as a supervisor and ascending as you rise in the company ranks. This has been a much higher amount than a holiday bonus historically has been- meaning you are probably better off forgetting that holiday bonus and enjoying your performanence incentive! ChaChing!

If your employeer is cheap and doesn't offer high incentive pay though, are you out of luck? Working for a non-profit, means that incentive based pay bonuses are not applicable. Being grant and government funded, I get it. I can imagine the tax-payer out-cry if government or private gov. funded agencies started to do large bonusus! We do have retention bonuses, but no annual performance based bonus. I'm glad to report that our holiday bonuses have lived to arrive another year- (though it always feels a little unsure as to if they will be received or not) and I'm grateful for that! Quick thing to remember if you are expecting that holiday or year end performanence based bonus- it's still taxable! So before you start spending that amount before you get it, remember that when it finally ends up in your bank account, it will be minus your normal payroll tax rate...Uncle Sam wants his own holiday bonus...

Is any bonus better than no bonus? A friend recently complained to me that instead of a monetary bonus, she got a $25 gift card for a local grocery chain. Instead of making her feel valued as an employee, it felt completely the opposite. The cash amount was way lower than she anticipated and made her feel less valued- not more. Is this just being a complainy-Clark Griswold- sort of person? I don't think so. How our employeers treat us makes a big difference! If your company did large bonuses in the past and is switching to smaller bonsus' this year- some sort of communication is needed to explain to employees the shift...was it a tough year? are they moving towards retenion/performance bonuses instead?...Something is not always better than nothing!  

Hoping that you have some form of bonus coming your way! Does your employer do holiday/incentive bonuses? Are you expecting a year-end amount? What's your plan for your extra cash?

No comments:

Post a Comment