Dear SafetyXChange Members:

Holiday bonus? Bah, Humbug!

According to a recent survey by Hewitt Associates, 59 percent of companies are planning not to award traditional holiday bonuses this year. But that doesn't necessarily mean they're playing Scrooge. The operative word in the first sentence is "traditional." Most companies will still give out a bonus. But you'll need to show that you earned it. This is especially true if your company has a variable pay plan. Here's a look at variable pay plans and a strategy to achieve a bonus under them this holiday season.

The Variable Pay Plan. . .

Variable pay plans involve the paying out of performance-based bonuses that employees must re-earn each year. Such plans are becoming increasingly popular. Hewitt found that 78 percent of organizations currently offer a variable pay program. That's a whopping 51 percent increase from the findings of a similar Hewitt survey in 1991.

If your company has a variable pay plan, you should take advantage and try to get the bonus you deserve. To do that you might have to have a talk with your boss and offer specific reminders of your performance and accomplishments over the year.

. . . And How to Take Advantage of It

How should you make the case for a bonus? Asking yourself what you have done to support the organization's strategic initiatives is not enough. Here are three key tactics you might want to consider in preparing for a performance review:

1. Keep a Journal. If you haven't been keeping a journal through the year, it will probably be too late for purpose of this year's bonus. But it's not too late to start building your case for next year. Keeping a journal is not only a good way to document your accomplishments but an organizational tool that enables you to identify and work on your weaknesses.

2. Crunch the Numbers. Quantifiable results are central to an annual performance appraisal and the case for a bonus. Before any review, you should create an easy-to-read summary of your accomplishments during the year, tying it back to the corporate goals. Try to phrase accomplishments in terms of objective results rather than subjective factors such as behaviors.

3. Prepare. Two to three weeks before your review, give the summary to your boss as a preview of what you'd like to discuss during your review. Guess what you did by doing this? You just did the homework for the boss and made the process of justifying your bonus easier.

Conclusion

Holiday bonuses remain a venerable tradition. But while employers are still willing to play Santa, they want the holiday payout to be based on performance. Today's employers don't want employees to feel entitled to a bonus just because the calendar says December. Tying the bonus to performance offers employers obvious advantages such as incentivizing employees to help the company reach its strategic goals and objectives and improving productivity.

You need to recognize the new rules and play the game. If you do, you should get the bonus you deserve.

MORE ON HOLIDAY BONUSES

Of Turkeys & Cash

The Hewitt study I cite above had some other interesting findings regarding holiday bonuses. Of the 41 percent of companies that said they will offer a holiday bonus in 2005:

• Nearly half (44 percent) will give employees a gift of food (e.g., turkey or ham);
• 37 percent will provide retailer gift certificates; and
• 13 percent will give cash.

Motivations for paying a holiday bonus:

• Saying thank you/showing appreciation (57 percent);
• Maintaining tradition (22 percent); and
• Boosting morale (18 percent).

As a result of the recent disasters, most notably Hurricane Katrina and the Asian tsunami, 9 percent of survey participants said that they plan to donate some or all of the money they would have spent on holiday bonuses to charitable organizations this year.

Lauryn Franzoni

THOUGHT FOR THE WEEK

The best way to predict the future is to create it.

Peter Drucker

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