The Elusive Christmas Bonus

With less than a week to go until Christmas Day, this week’s blog is full of festive spirit.  Unless, that is, you were counting on receiving a Christmas bonus this year.  Research conducted by One4All has revealed that only 7% of UK companies will hand out a Christmas cash bonus this year.  While the popularity of the Christmas bonus has been dwindling for some time now, particularly in the wake of the economic crash, this statistic does seem extraordinarily low.  So, why are companies saying “Bah humbug” to bonuses?

The Christmas bonus, as it is known today, originated in America during the onset of the 20th Century.  The concept gathered momentum and by the mid-1900s, it became commonplace for companies to offer their employees a percentage of their annual salary as a way of saying “thank you” for all their hard work throughout the year.  Yet as it became more widespread, the sentiment of expectation arose in the place of gratitude.

And this is precisely where the dilemma lies: with expectation comes the unravelling of the business logistics behind the bonus.  If employees expect it, then there is no longer an incentive to work hard in order to receive it.  Companies have latched onto this and have since introduced performance bonuses, awarded based on employee achievement throughout the year.  Yet this holds its own perils: which factors decide who qualifies for the bonus and who doesn’t?  With today’s threat of a company being taken to court by a disgruntled employee on the grounds of discrimination, awarding Christmas bonuses to staff has become rather risky.  Furthermore, what does the company do if it has a bad year and cannot afford to pay the bonuses?  It really is quite a quandary.

In addition, it could be argued that the Christmas bonus seems anachronistic in today’s society.  Current workplace culture bears little resemblance to that over fifty years ago, when employees would work at the same company for the majority of their career.  Such a practice fostered closer relationships between employees and their employers meaning that that the bonus was a genuine and personal gesture of gratitude.  Today, employee turnover is so high that the Christmas bonus is considered corporate rather than meaningful, which only adds to that aforementioned cult of expectation amongst employees.  Having said this, One4All’s research did also point out that the provision of a Christmas bonus did directly impact upon employee retention.  It is clear then, that employees like to feel appreciated.

So, with the difficulties enveloped in the Christmas bonus, what are companies looking to as alternatives to show appreciation for their employees this Christmas?  The Christmas party probably comes in first position, undoubtedly a festive way to celebrate, and with an adaptable budget depending on whether or not the year has been a good one financially.  This author recommends extra paid time off, still relatively inexpensive to implement given the general lack of productivity during the seasonal period.

The prize for the worst Christmas bonus of last year goes to Poundland who offered employees a 10 percent discount in store for a limited period of time, equating to 10 pence off each product purchased.  However, our favourite concept by far is the example set by a bank in America where every employee was given 1000 dollars with the strict instruction to pass it on and spend it on somebody who needed it more.  After all, isn’t this what Christmas spirit is really all about?

If you’re currently looking for a job, why not look at the job offers on our website?

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