Only 37 percent of companies will award a holiday bonus to employees this year,
according to a survey by Hewitt Associates. Meanwhile, the number of organizations
offering performance-based bonuses continues to increase, from 59 percent in
1995 to nearly 80 percent in 2004.
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moving to variable pay programs," says Ken Abosch, a business leader for
Hewitt Associates. "Variable pay is designed to help employees concentrate
on company goals and objectives, while eliminating 'entitlement' issues that
often arise with a holiday bonus."
Of the 37 percent of companies that will offer a holiday bonus program in 2004,
nearly half (49 percent) will provide retailer gift certificates, 37 percent
will award cash, and 21 percent will give employees a gift of food (e.g., turkey
or ham).
Companies plan to spend a median of $550 per employee on cash awards, and a
median of $25 on both gift certificates and food, according to the survey.
"While the majority of companies offering a holiday bonus will spend no
more than 2 percent of payroll on these awards, we're finding that organizations
with variable pay programs are budgeting nearly 10 percent of payroll in 2005
for these pay-for-performance incentives," says Abosch. "They're clearly
sending a message to employees that they will be rewarded for high performance."