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CHiPs25
Atlanta Falcons Fan
ATL
Member since Apr 2014
1538 posts

Update: Christmas Bonuses
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.
This post was edited on 12/3 at 9:09 pm


bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
10085 posts

re: Update: Christmas Bonuses
quote:

My thoughts were to bring everyone together
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.

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 at 8:02 am


rowbear1922
LSU Fan
Baton Rouge
Member since Oct 2008
9021 posts

re: Update: Christmas Bonuses
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 at 8:07 am


HailToTheChiz
Auburn Fan
Back in Auburn
Member since Aug 2010
28440 posts

re: Update: Christmas Bonuses
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


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50
Rendevoustavern
LSU Fan
X109
Member since May 2018
189 posts
 Online 

re: Update: Christmas Bonuses
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


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110
TheriotAF
LSU Fan
Member since Mar 2013
553 posts
 Online 

re: Update: Christmas Bonuses
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.


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311
PearlJam
Auburn Fan
NotBeardEaves
Member since Aug 2014
10121 posts
 Online 

re: Update: Christmas Bonuses
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.
This post was edited on 11/29 at 8:20 am


LSU
LSU Fan
Houston
Member since Oct 2003
7403 posts
 Online 

re: Update: Christmas Bonuses
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.


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100
BitBuster
LSU Fan
Lafayette
Member since Dec 2017
514 posts

re: Update: Christmas Bonuses
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.


McNeeseLSU
McNeese State Fan
Baton Rouge
Member since Feb 2007
323 posts

re: Update: Christmas Bonuses
This post was edited on 11/29 at 8:34 am


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OMapologist
Valparaiso Fan
Member since Oct 2015
583 posts

re: Update: Christmas Bonuses
quote:

I would say that a bonus is just that; a bonus. It should not be expected, albeit rather nice to have around the holidays


While that seems obvious and sounds nice, I can tell you that definitely is not the way it is. If someone has been receiving the same bonus for several years, they are going to be expecting it and will feel entitled to it. Not saying it's right. It's just human nature.


cuyahoga tiger
LSU Fan
NE Ohio via Tangipahoa
Member since Nov 2011
4020 posts

re: Update: Christmas Bonuses
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.


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143
CHiPs25
Atlanta Falcons Fan
ATL
Member since Apr 2014
1538 posts

re: Update: Christmas Bonuses
quote:

o 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.


In a corporate setting, they would just give out a bonus and not tell anyone why they lost some of the bonus from the year before.

If I was an employee and was expecting to get $3-4k in a bonus and I ended up getting much less than that, I wouldn't be happy. But, if my company forewarned me that the bonuses would be light this year it wouldn't be as much of a blow.

Think National Lampoon's Christmas Vacation. Clark was expecting a large check because he was going to get his pool. He received jelly of the month membership and was pissed because nobody told him prior to.


TheWiz
LSU Fan
Third World, LA
Member since Aug 2007
9639 posts

re: Update: Christmas Bonuses
quote:

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 guess I don't realize how rare this is. We have a catered luncheon, a giant party (think Audubon Tea Room & Bucktown All-Stars), and we always receive $100 at Christmas time.

Real bonuses are always around Feb. 15th.
This post was edited on 11/29 at 9:12 am


hungryone
LSU Fan
river parishes
Member since Sep 2010
7703 posts
 Online 

re: Update: Christmas Bonuses
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.


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91
CHiPs25
Atlanta Falcons Fan
ATL
Member since Apr 2014
1538 posts

re: Update: Christmas Bonuses
quote:

guess I don't realized how rare this is.


With an unemployment rate so low we have to do everything we can to keep our good talent here. We typically have events throughout the year (top golf, Atlanta United Games, Braves games, etc) for groups of employees that allows them to get away from the office. We are a manufacturer so any time away from the office is loss productivity in the shop.



TheWiz
LSU Fan
Third World, LA
Member since Aug 2007
9639 posts

re: Update: Christmas Bonuses
How recent are your 10 new hires? I think we generally scale folks down less than a year. Especially those within 6 months.

That might keep your original employees closer to the original bonus plan.


arkiebrian
Arkansas Fan
Midtown
Member since Nov 2006
3681 posts

re: Update: Christmas Bonuses
So paying 1/3+ less in taxes didn’t help?


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24
CHiPs25
Atlanta Falcons Fan
ATL
Member since Apr 2014
1538 posts

re: Update: Christmas Bonuses
quote:

How recent are your 10 new hires?


We've had 2-3 very recent and the rest scattered through the year. In the past, 1st year employees received a small bonus ($500) so scaling back on the new employees wouldn't free up too much money.


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30
Lawyered
Ole Miss Fan
The Sip
Member since Oct 2016
2858 posts

re: Update: Christmas Bonuses
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?


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