Nonprofit HR’s Blog

Thanksgiving is upon us and no doubt many workers will hit the stores this weekend wondering if their contributions to the nation’s economy will be offset by a year end bonus from their employers. Many organizations participate in this practice for many different reasons and with several strategies in mind.

Mike Myatt has some thoughts about why organizations should or should not provide year end bonuses.

…no matter what you choose to do, there will be people who find fault with your decision. Keep this in mind; leadership is not a popularity contest — it’s about doing the right thing.

In order for bonuses to be truly effective they must be relevant, meaningful, in alignment with cultural values, and tied to the right set of metrics. It is not the bonus that is right or wrong, but the manner in which it is rolled-out. I have witnessed company bonuses work marvelously well, and I have seen them create great animosity and discord. I have witnessed bonuses motivate the correct behaviors and I’ve watched them motivate abhorrent behavior. The validity of a bonus should not be at issue, but the wisdom, motives and expertise of the bonus program architects should come under great scrutiny… 

I can’t even begin to communicate the number of times I’ve heard employees complain about the size of their year-end bonus…It was if they felt entitled to significant rewards solely based upon the fact that they happen to be employed. Is a year-end bonus a right of entitlement or a privilege to be earned? I believe that it can actually be both, but that decision lies solely with the employer, and is not really up to the employee no matter how much they might feel it is.