Only a minority of employers will be awarding holiday bonuses this year, according
to a new study from Hewitt Associates, a human-resources outsourcing and consulting
Nearly two-thirds (65 percent) of U.S. organizations will not offer a holiday
bonus this year, according to the study. The number of companies that do not
offer holiday bonuses has ranged from 64 percent to 69 percent since 1999, according
to the firm.
The firm says the trend may reflect, at least in part, the shift by companies
to performance-based awards.
"Companies continue to move away from entitlement awards to awards based
on performance," says Ken Abosch, a business leader for Hewitt Associates.
"In fact, most organizations are seeking a direct connection between performance
and awards, and are now focusing on variable pay incentives, which are designed
to help employees concentrate on company goals and objectives, while eliminating
entitlement issues that often arise with a holiday bonus plan."
Hewitt's study reveals that nearly half (47 percent) of companies have never
offered a holiday bonus, while 17 percent discontinued their program. Of those
organizations that canceled their holiday bonus initiatives, 52 percent did
so between 2000 and 2003, and 42 percent did so in the 1990s. Companies said
they cut holiday bonuses primarily due to cost (58 percent), entitlement issues
(32 percent), and the development of pay-for-performance plans (29 percent).
Of the 35 percent of companies that will offer a holiday bonus program in 2003,
28 percent plan to provide cash bonuses, 28 percent will give retailer gift
certificates and 23 percent will reward employees with a gift of food (e.g.,
turkey or ham).