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Susan M. Heathfield

Do You Plan a Year-End Bonus?

By December 17, 2013

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What percentage of employers do not plan a year-end bonus, gifts, or perks? According to a survey by Challenger, Gray & Christmas, roughly 43% of employers do not award a year-end bonus. This compares with 28% who did not award a bonus in 2007.

Among the 53% of companies that do award bonuses, half give employees either a non-monetary gift or a nominal monetary award valued at less than $100. Of the remainder awarding some type of year-end bonus, 31% give all employees a monetary bonus based on the company's overall performance, while 19% give bonuses only to selected employees based on the individual's performance.

John A. Challenger, CEO, speculates that economic conditions are partially why the year-end bonus is becoming more scarce. But, he also believes that employers may not see the bonus as having a positive impact on employee morale and prefer performance-based bonuses for high performers. More companies may also be spreading the monetary awards throughout the year in preference to the traditional holiday bonus.

Small to mid-sized companies may also not have a lot of cash. Challenger says, "The latest available statistics from the United States Census Bureau show that of the 6.0 million employer firms counted in 2007, 5.9 million had less than 100 employees. Furthermore, of the nearly six million firms in the U.S. in 2007, 4.6 million or more than three-quarters had sales receipts totaling less than $1,000,000."

"After payroll, insurance costs, equipment and supplies, etc., the vast majority of employers probably do not have much left over to throw into a bonus pool."

Employee recognition is one of my favorite topics. But, as employers have discovered, there are right ways - and wrong ways - to recognize employees. A year-end bonus may become an entitlement rather than a gift that makes employees feel happy and valued. Here's more about employee rewards and recognition.

Image Copyright Rey Rojo

More About Employee Recognition

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