Year-End Bonus or a Gift?

The holiday season is around the corner, and one must consider if bonuses are to be paid. There are few areas that cause as many false expectations and disappointment amongst employees as determining the right amount of bonus. It seems that no matter what the employer does, it is never enough for certain employees.

A few guide lines:

In an ideal world, the bonus program is transparent and tagged to identifiable results of the employee’s efforts, coupled with the profitability of the company. Individual success must be rewarded, especially if it is geared towards achieving the firm’s objectives. The average bonus range is up to 27% of base salary.

If a program does not exist for a performance based bonus, then a flat-out gift may be in order. For reference - the typical amount given in 2014 was between two to four weeks of salary.

Whether a performance based bonus or a gift, be sure to pay in a timely manner. Firms that delay payment create an unhappy work force and resentment. For the firms that do not want to give bonuses, please avoid the allusion of making a charitable donation in honor of your employees. No one is impressed, and, after all, charity should begin at home.