Holiday Bonuses: Don't Make It Feel Like 'The Hunger Games'
BY Jay Steinfeld
While you figure out how much (if any) to give to employees, they anxiously await their piece of the bonus pie. Take the tension out of this time with these tips.
Holiday bonuses are a touchy subject among business owners. Should you or shouldn't you? Turkey or check? How much and to whom? Every year or only when the going is good?
To employees, anticipating end-of-year bonuses can feel like waiting for a bloodbath in the "Hunger Games" as everyone battles for his or her own piece of the bonus pie.
Undefined expectations around bonus time make matters worse: at best, your team will be on edge wondering what's going to happen; at worst, even if they do receive extra cash, employees will eye it with suspicion (how much more did so-and-so receive?).
Here's how to address the holiday bonus issue and avoid any unnecessary drama.
The nature of a "bonus" is that it isn't an incentive for excellent individual performance--it is a chance for a leader to show his or her gratitude for a great year with a little extra "something." Growing a holiday bonus structure that makes employees and teams feel pitted against one another for a finite number of dollars is both counterproductive and potentially damaging.
It's important to be sensitive to your employees' expectations around any kind of compensation. It should come as no surprise that if you've given out cash in the past, some of your staff will be counting on a repeat performance to help with this year's shopping bills.
Be as open as you can be with your team on what they should be expecting--was it a great year that gives you some wiggle room for larger checks? The increased amount is worth keeping a surprise, but there will be sighs of relief knowing that *something* is on its way.
Likewise, if your bonus amounts vary from employee to employee, make it clear why they received what they did if there was a performance factor taken in. A simple explanation can go a long way: "Thank you for your great work this year. If you can improve this particular skillset over the new year I think you'll find your next bonus even more exciting." Be honest and direct if there is room to grow.
And what if times are tough and there's no bonus on its way? After making it clear that the lack of bonus is not tied to employee performance, it's time to get creative if holiday bonuses are your usual thing.
Perhaps skip the big holiday party or conference room renovation and put that money towards bonuses instead. Looking for ideas or feedback? I bet you know a group of employees that would be more than happy to share their ideas if given some options. Keep it heartfelt and be honest about what's going on. You might just discover your best holiday bonus idea yet.
Make It More About Celebration, Less About Performance
I'm a strong believer in performance-based incentives, but that's what happens throughout the rest of the year. Holiday bonuses hold a unique opportunity for a CEO to say thanks directly to each employee.
My personal approach to holiday bonuses at Blinds.com is very straightforward. We take a percentage of our annual profits and divide it equally among our entire team at an all-hands meeting.
Yes, that equal distribution means that my holiday bonus as CEO is exactly the same as the fresh college graduate that started working for us a year ago. And honestly, I love it that way. Growing our business is a team effort and it's also a very tangible reminder of how staying lean is directly profitable to each employee.
Cash or Turkey?
I like giving money (versus a logo-emblazoned object or food basket) to my employees. It's a great way to give families a little extra financial cushion as they are purchasing gifts or saving for a new year ahead.
But this may not work for your team or your budget. Your company culture may appreciate different tokens of thanks and you would do well to take the time to get to know what the most appreciated gesture for their own team is.
Don't make this time feel like the "Hunger Games." Help create a positive end-of-year air of celebration that all of your employees can join in and appreciate.
JAY STEINFELD is the founder and CEO of Blinds.com, the industry leader in online window covering sales, representing over half of window treatments sold online and doing more than $100 million in sales annually. @BlindscomCEO