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Year End Bonuses: Part of Holiday Gift-Giving?

December 11, 2012

web-bonusIn the spirit of giving and seeing as the holiday season matches up with yearly performance reviews, gift-giving could be associated with year-end bonuses.  Unless you have a clear year-end bonus policy, be very careful about how it is presented to staff. Once you let the genie out of the bottle it is very difficult to put him back in – i.e. annual bonuses will be expected in subsequent years. And unless you have an open book policy, your employees will most likely come to believe that they are entitled to a bigger bonus year after year.

If you do give out a bonus, the calculation method should be clear: either a percentage of salary, a fixed amount based on seniority, or one linked to some KPI ratios that you have tracked throughout the year. In these situations, the bonus is totally linked to remuneration and should be presented as part of the year-end review, and not as a holiday present.

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