To bonus or not to bonus?

So it’s that time again, the holiday season where everyone who employs people has to make that decision.

Do we give our team a bonus this year or not…..?

It’s a question that’s been doing the rounds for many years now, with arguments produced either way that could convince you.

So let’s look at a couple and the impact they may have on employee engagement:

Argument 1 – Yes we should:

Money talks of course doesn’t it? In good times, employees have always come to expect a little extra something in their Christmas stockings in the form of a bonus.

I remember many instances where I flocked to my inbox during the last pay period of the year to find out what that little extra sum was. Any griping about long hours and insufficient pay would temporarily be forgotten once everyone received their bonuses wouldn’t it and all would be well in the world.

Giving a bonus says all the right things about us as an employer:

  • Its shows we care
  • It shows we value our employee’s contribution
  • It shows we recognise that this time of year is expensive
  • That we want to help where we can, at a time when it will be appreciated most

Argument 2 – No we shouldn’t:

Why not? Well for starters there’s many pieces of research that suggest it’s just not a good idea

According to a recent survey by American Express, holiday gift giving by employers to their employees is on a rapid decline.

Last year, only 27 percent of business owners gave out end-of-year bonuses, down from 35 percent in 2012.

So what’s the problem?

Think about it, what are you going to give?

Let’s answer to that question on three levels

  • Money yes, but how much – a fixed amount or a percentage? Either way the amount can be a problem, if it’s an equal amount for everyone it will be a large sum for some but at best insignificant to others and at worst insulting, so where do you pitch it….
  • Based on what criteria? – individual performance or contribution to company performance? Are you sure that everyone has contributed to the company performance… Even the ones that you know are underperforming and if you’re honest if you had your way wouldn’t be coming back next year? Even if you’re not thinking that I guarantee some of your team are…
  • To who – at what point is the magic cut off date, everyone employed at say Dec 1st for example. But surely the person who was employed on January 1st has contributed more than the person employed at the end of November…..

Just a few of the potential pitfalls or difficult questions you’ll have to answer.

So let’s look at this from an employee engagement point of view:

Without going into all the details of what engagement is and what drives it lets keep it simple and agree that what engages you might not engage me and the only thing that can engage both of us is to be treated and valued as an individual, as a person and not just as an employee.

With that in mind when you give the exact same gift to everyone on your payroll depending on how you’ve answered the many difficult questions, you are, in essence, saying that no one is special and, therefore, you’re not going to put any thought behind exclusivity, you are actively demonstrating that you don’t treat them as individuals but as a collective.

So just give everyone an Amazon gift card, or a ham, or a coffee cup with the company logo on it. There’s no better way of making your people feel like they’re a small cog in your big wheel.

So when you’re thinking about if you should give a bonus or not, think carefully as it’s not as simple as it seems.

And if you can’t come up with an answer to the problem, ask your team as they will I’m sure help you find the solution.

To learn more about how to do all this and the many other challenges that leading and engaging people can bring subscribe to one of our leadership and engagement development programmes

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