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Message
Update: Christmas Bonuses
Posted on 11/29/18 at 7:57 am
Posted on 11/29/18 at 7:57 am
UPDATE:
We discussed this at length over a few drinks and we decided to still provide a bonus but we have reduced the amount. Last year we gave out approximately $60k in bonuses and this year we’re going to give out $40k. We have fired some of the people that received the highest bonus last year which automatically saved some money and then we have some employees that we’re going to fire after the holidays. Those employees are getting a lower bonus as well. After that, we kept most people whole from last year and some received a small bump. The new employees are receiving $250 instead of $500 that we gave last year.
In addition, we are creating a COGS metric for 2019 that will be tracked and reported on throughout the year. Our Christmas bonus for 2019 will be based on this so employees can keep track of what their potential bonus will be.
I have read most of the replies on here so I appreciate everyone’s input.
Merry Christmas.
Good Morning MT-
My family owns a business and in years past we have always provided Christmas Bonuses' for our employees. Typically we assign a dollar figure based on tenure with the company with the highest payout around $5,000. We have done this since we were a much smaller company and now we've just hired our 43rd employee which is approximately 10 more than we had this time last year. In 2017 we gave out over $60k in bonuses and if we were to use the same logic this year that number would be over $70k. We always knew that eventually we wouldn't be able to continue to give out these substantial gifts and I believe that time is now.
We have had a flat year revenue wise and lost money profit wise due to higher than expected COGS. We have always had a slim payroll for our revenue which is why we've had the expansion in labor this year.
Any feedback on the best way to ease the blow to our employees that they're not going to be getting the same bonus that they have expected in the past. Some people will receive the same as last year while other will receive less. The example I used earlier of the $5k payout will be maybe $1k this year. We would love to give the normal bonus this year, but we just can't.
Any advice on how to approach this would be appreciated. My thoughts were to bring everyone together before our Christmas party (which is when we usually give these out) and explain to them that the bonuses will not be as rich as years' past.
Thanks in advance and Happy Holidays.
We discussed this at length over a few drinks and we decided to still provide a bonus but we have reduced the amount. Last year we gave out approximately $60k in bonuses and this year we’re going to give out $40k. We have fired some of the people that received the highest bonus last year which automatically saved some money and then we have some employees that we’re going to fire after the holidays. Those employees are getting a lower bonus as well. After that, we kept most people whole from last year and some received a small bump. The new employees are receiving $250 instead of $500 that we gave last year.
In addition, we are creating a COGS metric for 2019 that will be tracked and reported on throughout the year. Our Christmas bonus for 2019 will be based on this so employees can keep track of what their potential bonus will be.
I have read most of the replies on here so I appreciate everyone’s input.
Merry Christmas.
Good Morning MT-
My family owns a business and in years past we have always provided Christmas Bonuses' for our employees. Typically we assign a dollar figure based on tenure with the company with the highest payout around $5,000. We have done this since we were a much smaller company and now we've just hired our 43rd employee which is approximately 10 more than we had this time last year. In 2017 we gave out over $60k in bonuses and if we were to use the same logic this year that number would be over $70k. We always knew that eventually we wouldn't be able to continue to give out these substantial gifts and I believe that time is now.
We have had a flat year revenue wise and lost money profit wise due to higher than expected COGS. We have always had a slim payroll for our revenue which is why we've had the expansion in labor this year.
Any feedback on the best way to ease the blow to our employees that they're not going to be getting the same bonus that they have expected in the past. Some people will receive the same as last year while other will receive less. The example I used earlier of the $5k payout will be maybe $1k this year. We would love to give the normal bonus this year, but we just can't.
Any advice on how to approach this would be appreciated. My thoughts were to bring everyone together before our Christmas party (which is when we usually give these out) and explain to them that the bonuses will not be as rich as years' past.
Thanks in advance and Happy Holidays.
This post was edited on 12/3/18 at 9:09 pm
36
Posted on 11/29/18 at 8:00 am to CHiPs25
quote:So you can have communal bitching and deep sighs in front of you? I'm far, far from the corporate world, but I know I wouldn't want that.
My thoughts were to bring everyone together
If you are transparent and lead by example by having the highest positions in the company take little to no bonus that would probably speak volumes. Again, not in a corporation, but I am a human.
This post was edited on 11/29/18 at 8:02 am
Posted on 11/29/18 at 8:06 am to CHiPs25
I've never received a year end bonus so take this with a grain of salt, but I would say that a bonus is just that; a bonus. It should not be expected, albeit rather nice to have around the holidays. They should be very appreciative they are receiving additional income if they do. If someone does seem to be upset, I would explain the more employees, flat sales and lose in profit. Cannot expect the same bonus when profit is down or stagnant.
This post was edited on 11/29/18 at 8:07 am
Posted on 11/29/18 at 8:07 am to CHiPs25
quote:
Any feedback on the best way to ease the blow to our employees that they're not going to be getting the same bonus that they have expected in the past. Some people will receive the same as last year while other will receive less. The example I used earlier of the $5k payout will be maybe $1k this year. We would love to give the normal bonus this year, but we just can't.
My thoughts are that a bonus is just that...it's a bonus. No employee should expect a certain bonus on a yearly basis.
If you are close enough with the employees, and you are actually really concerned about their thinking, then just mention the rough business year to them as an aside. Not publicly or together, but privately.
I'd honestly just give the bonus and see if anyone bitched about it. If bitching occurs, then offer an explanation
Posted on 11/29/18 at 8:14 am to CHiPs25
My company has done something very similar to this. Just because we paid you $5k last year doesn't mean you get $5k+ next year. We usually tie the bonus to some sort of performance metric so in the event they come bitching it is supported with some additional reasoning vs well company isn't doing that well but don't mind my new porsche outside.
IMO, I wouldn't tell anyone about the amount and just direct deposit all of the bonuses and let it ride. Although some people grow to expect a bonus, even more so an increased amount every year due to tenure (in your situation), they are always contingent on the performance of the business. But don't mind my new porsche, the new rear taillights are siiiiiiiiiick
IMO, I wouldn't tell anyone about the amount and just direct deposit all of the bonuses and let it ride. Although some people grow to expect a bonus, even more so an increased amount every year due to tenure (in your situation), they are always contingent on the performance of the business. But don't mind my new porsche, the new rear taillights are siiiiiiiiiick
Posted on 11/29/18 at 8:15 am to CHiPs25
However you do it, I wouldn't wait much longer. Some people figure in those bonuses towards Christmas gifts (even though they shouldn't). The earlier people have a heads-up the better and as long as you explain that the bonuses are not going completely away, just that they are reduced I would think most people would take it well. Maybe in a morning meeting?
Me personally, I would not do it right before a Christmas party. That sounds like a set up for a potentially awkward situation.
Me personally, I would not do it right before a Christmas party. That sounds like a set up for a potentially awkward situation.
Posted on 11/29/18 at 8:18 am to CHiPs25
For the future, bonuses should be tied to profits and reward production over seniority. The structure should be clear and well communicated to the employees.
ETA: as for the current situation, be honest, upfront and let the employees know as soon as possible.
ETA: as for the current situation, be honest, upfront and let the employees know as soon as possible.
This post was edited on 11/29/18 at 8:20 am
Posted on 11/29/18 at 8:23 am to CHiPs25
My company sent this note out when they had to scale them back for 2016.
Will there be bonuses for 2016?
Our practice has been to pay bonuses based on performance relative to Plan.
In 2015, we fell below Plan but elected to pay scaled-down bonuses to substantially all of the workforce, with a view that we had positioned ourselves for the company's performance to trend up in 2016, even if the downturn continued (primarily as a result of the investments we had made). Unfortunately, that has not been the case.
In 2016, we are again coming in below Plan. In this case, actual performance is coming in below a revised Plan forecast that had been adjusted downward relative to prior expectations. With that in mind, we intend to defer a final decision on bonuses until early 2017, when 2016 financial results are finalized. With current performance expectations, however, we would not expect to pay across-the-board bonuses. Bonuses instead will be determined on a case-by-case basis based on specific accomplishments and contributions.
Will there be bonuses for 2016?
Our practice has been to pay bonuses based on performance relative to Plan.
In 2015, we fell below Plan but elected to pay scaled-down bonuses to substantially all of the workforce, with a view that we had positioned ourselves for the company's performance to trend up in 2016, even if the downturn continued (primarily as a result of the investments we had made). Unfortunately, that has not been the case.
In 2016, we are again coming in below Plan. In this case, actual performance is coming in below a revised Plan forecast that had been adjusted downward relative to prior expectations. With that in mind, we intend to defer a final decision on bonuses until early 2017, when 2016 financial results are finalized. With current performance expectations, however, we would not expect to pay across-the-board bonuses. Bonuses instead will be determined on a case-by-case basis based on specific accomplishments and contributions.
Posted on 11/29/18 at 8:25 am to CHiPs25
Company Christmas party AND bonuses?
I'm not trying to be a dick but I hope your employees realize how rare that is in today's world.
I haven't worked with a company that had a holiday bonus since 2003. The company sponsored Christmas parties stopped about 2009, they became pot lucks.
Your company sounds like a great one to work for.
I'm not trying to be a dick but I hope your employees realize how rare that is in today's world.
I haven't worked with a company that had a holiday bonus since 2003. The company sponsored Christmas parties stopped about 2009, they became pot lucks.
Your company sounds like a great one to work for.
Posted on 11/29/18 at 8:33 am to CHiPs25
This post was edited on 11/29/18 at 8:34 am
Posted on 11/29/18 at 8:44 am to CHiPs25
I would keep same bonus schedule for this year, unless you have communicated the possibility of reduced bonuses, due to company profitability.
It is wise to have quarterly updates, in newsletters or meetings, with all employees on company performance. Keep them updated on how end of year bonuses are tracking, so it is no surprise.
It is wise to have quarterly updates, in newsletters or meetings, with all employees on company performance. Keep them updated on how end of year bonuses are tracking, so it is no surprise.
Posted on 11/29/18 at 9:07 am to CHiPs25
You should definitely tell people (everyone, at the same time, via email or other written format) that bonuses will be smaller this year due to a variety of factors. Emphasize that your business is growing, that you’re not in financial distress, but that the bonus structure and amounts of the past are being re-examined. Thank them for their hard work, mention specific success points (X units sold, Y contracts closed or whatever is appropriate to your business), and throw in a couple of sentences about your excitement for 2019 and what next year will hold.
Telling people informally, one on one, means that some people know before others, leading to a compounding of the possible feelings of unequal treatment already generated by the change in bonuses.
Definitely don’t do this in a group setting just before a Christmas party. Also consider the size/expense of the party: if you dramatically scaled back bonuses and then give a $5K party, someone in that room is thinking “hey, that could have been my bonus”.
Best office Christmas parties in my work career were simple—potluck, plus we adopted kids from the local Angel Tree, and everyone brought the stuff they’d purchased & we wrapped it all up as part of the party. Over a couple years, we went from sponsoring two kids to doing 6-8 because it made people feel good.
Telling people informally, one on one, means that some people know before others, leading to a compounding of the possible feelings of unequal treatment already generated by the change in bonuses.
Definitely don’t do this in a group setting just before a Christmas party. Also consider the size/expense of the party: if you dramatically scaled back bonuses and then give a $5K party, someone in that room is thinking “hey, that could have been my bonus”.
Best office Christmas parties in my work career were simple—potluck, plus we adopted kids from the local Angel Tree, and everyone brought the stuff they’d purchased & we wrapped it all up as part of the party. Over a couple years, we went from sponsoring two kids to doing 6-8 because it made people feel good.
Posted on 11/29/18 at 9:21 am to CHiPs25
So paying 1/3+ less in taxes didn’t help?
Posted on 11/29/18 at 9:26 am to CHiPs25
I wonder how common it is for people to do their Christmas gifts and stuff based on their expected bonus?
Another way to phrase it is, how many folks DEPEND on their bonus for all of their gifts and stuff?
Another way to phrase it is, how many folks DEPEND on their bonus for all of their gifts and stuff?
Posted on 11/29/18 at 9:29 am to CHiPs25
Sign them all up for the Jelly of the Month club
Posted on 11/29/18 at 9:36 am to CHiPs25
Where I work the Christmas bonus is a percentage of pay for the year that goes up or down based on company performance. It’s been as high as 29% but was 5% last year. This year I know they are saving 40% in taxes so if they pull that 5 percent crap I’ll be searching for something else.
We also have a Christmas party that has been toned down from previous years (no alcohol). I’m fine with that if the money goes to a better bonus.
We also have a Christmas party that has been toned down from previous years (no alcohol). I’m fine with that if the money goes to a better bonus.
Posted on 11/29/18 at 9:41 am to CHiPs25
Only checking in to say how much it sucks to not have a bonus because of "no funds" in a public school system.
Carry on you wonderful people who have made far better financial decisions than I
Carry on you wonderful people who have made far better financial decisions than I
Posted on 11/29/18 at 9:47 am to CHiPs25
I'd take the hit this year, then roll out clearly defined metrics for bonus payout. Test these against previous years, to get an idea of where the payout would fall. Tweak accordingly.
Posted on 11/29/18 at 9:55 am to CHiPs25
I'd cancel the party and put those funds toward bonuses. I'd also give as close as possible to last years bonuses because your employees are relying on them. They shouldnt expect to always get extra but you have made it routine.
While giving them out, explain how tough it was and the new metrics youre using to calculate bonus potential going forward.
While giving them out, explain how tough it was and the new metrics youre using to calculate bonus potential going forward.
Posted on 11/29/18 at 9:57 am to CHiPs25
quote:in a manufacturing setting, a long time employee that has been getting 5k bonus every year, will absolutely be counting on that bonus. It is very late in the year to spring this on them. I would try to keep the bonus closer in line with what they are expecting and let it be known bonuses for the next year will be tied directly to profits/should not be expected.
used earlier of the $5k payout will be maybe $1k this year
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