This is one of the trickiest questions to answer this time of year. Holiday bonuses are the proverbial double edge sword for owners. In one instance, they want to share the holiday “cheer” with the people that have helped all year long. They want to seem powerful over the employees by gifting them money. Many also don’t want to be viewed as a holiday “grinch”. In the other instance, owners don’t want employees to expect the same holiday bonus every year and at the same dollar level.
This is all a trap. If a company has a great year and the owner gives everyone a $1,000 bonus, the employees will expect the same holiday gift next year (or more). Remember these holiday bonuses should not be confused with performance bonuses which have a preset criteria for them to be obtained by the employee. If the staff is talking about “I wonder what the bonus will be this year”, that’s a bad sign. Holiday bonuses should not be used to send a message to a particular employee.
What should a small business do? Owners should give nominal holiday bonuses of less than $500. They should not based on anything except the good cheer of being part of the company. They should remain fairly level over the years. They should be gift cards or cash with a thoughtful note about how important the person is to the company. If possible, a company holiday party can also boost the celebration culture this time of year.
I am in favor of performance and holiday bonuses. However, a small business owner should not confuse the two.
Do you give holiday bonuses? Tell me how you do it.
