It is the end of the year, businesses are hastily trying to finish reports and budgets with the looming question; Should I give a Christmas bonus?
A Christmas bonus can be a daunting topic for most business owners. It is a great way to show your appreciation for your staff but if like most small businesses, you have had a tough year and a monetary bonus may not be a viable option.
Here are some guidelines to keep the staff happy and motivated without bankrupting the business:
Budget
Christmas bonuses are probably not part of your business plan and most businesses won’t have a great deal of money hanging around at the end of the year. It is important to set a budget. Consider your revenue for the past year and forecast for the next. If you are a startup business, set a realistic budget as this will act as a precedent for future expectations.
Be Honest
Small businesses are vulnerable in the volatile market so do not feel guilty if you cannot provide your employees with a cash gift. It is important to be honest with your employees. If they have received a cash gift for the past five years but this year they receive nothing without explanation it could question your relationship and their loyalty to the company. Before you offer them a membership to the Jelly-of-the-month-club, sit them down face to face and explain that no one will be receiving cash gifts this year but it is not a reflection of your appreciation.
Introduce a performance based bonus
A performance based bonus is a great way of rewarding an employee’s real contribution to the company. It also motivates them and other members of staff. Set realistic goals and make sure you follow up on your promise.
Reward them in other ways
Christmas bonuses do not have to be monetary. Give your employees a small gift, a handwritten card or offer them an extra day of paid holiday with their families. Treating your team to a Christmas lunch or activity is a great way of thanking them for their time as well as team building.
Christmas bonuses (in whatever form) are important to show your gratitude to their contribution to the business. If you are planning on giving out cash as a holiday bonus, it will need to be taxed as a lumpsum payment.