Employee Bonuses Are Shrinking
Posted on December 11, 2006
An article form the Christian Science Monitor reports on some growing scrooge-like behavior currently taking place in corporate America -- bonuses are shrinking. The Monitor writers, "In many companies, the year-end bonus is becoming a quaint memory of earlier times, when an extra envelope from payroll in December was an almost certain reward for everyone in a firm." That's depressing but this comment from Brian Drum, president of Drum Associates in New York is even worse. "We're seeing the holiday bonuses disappear," says Brian Drum. The article goes on to report that a 2005 survey found 59% of companies do not award a holiday bonus -- but many do offer a performance-based bonus.
In a 2005 survey by Hewitt Associates, 59 percent of companies said they would not award holiday bonuses. But more than three-quarters of firms offer performance-based bonuses that must be reearned each year.If you like bonuses you might want to switch to a career in the financial-services industry. They pay the highest bonuses according to the article. Some companies are also handing out gift cards this year. Another point made in the article is that bonuses are more difficult for smaller companies where the prospect of future earnings is less certain.Among 1,500 small businesses, 39 percent plan to give employees holiday bonuses this year, according to Constant Contact, an e-mail marketing service for small businesses. That is up 2 percent from last year.
"For small businesses, cash flow and cash management are more difficult issues," says Gail Goodman, CEO of Constant Contact. "It is harder to see out to the future and understand where cash will be next quarter and next year. It takes more confidence for a small business to pay a bonus."
Whatever a company's size, employees are frustrated by a "lack of clarity about how one qualifies for that bonus," says Bill Kuntz, vice president of Princeton One, an outplacement firm. "They want to be treated fairly and have clear expectations."