quote:
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.

A few thoughts, based on what you have said and given that there is a long time tradition of this and therefore an expectation.

1) I think if you can find a way to keep people as flat as possible do it. However you need to set the expectation that going forward bonuses are just that and are not guaranteed.

2) If at all possible try to meet with each person on one tell them the situation and ask them what they were expecting. Transparency is the best policy.

3) DO NOT DO THIS IN A GROUP SETTING

4) Try to hammer home that ownership/management is taking the biggest brunt of it.

5) CANCEL THE CHRISTMAS PARTY. I'm not sure I know a single person that wouldn't rather have $$$ in their pocket to spend at their discretion instead of going to a company party. I think it goes a long way to tell people we'd rather pay.