Whether to Award a Year-End Bonus

Whether to Award a Year-End BonusWhether to Award a Year-End BonusAs the year comes to a close, it can be an ideal time to recognize individual, departmental and company-wide success with year-end bonus pay. Depending on how they are structured, bonuses may reward strong individual contributions or overall company growth. Will your company award bonuses? In a new Robert Half survey, 51 percent of the senior managers responded that they expect to offer somewhat higher or much higher bonus pay by the end of the year.See the data from the senior manager survey in the infographic, Holiday Bonuses Boon or Bust.Whats most important for employers to know about awarding year-end bonus pay - or not?1. Know your objectivesSome companies give bonuses as a way of thanking their employees for their contributions and do not tie them to specific metrics. These are usually viewed as more informal holiday bonuses and may be more nominal than performance-cousined bonuses. However, these holiday bonus es also create goodwill with employees and contribute to creating a positive company culture.Companies may also offer a one-time bonus as an incentive for employees or teams around a specific project or goal. For example, they may be planning a new division, initiative or relocation that will require a significant amount of time or commitment from the staff. These bonuses are also often structured with specific metrics and goals.According to the latest Robert Half Salary Guide for Accounting and Finance, highly skilled professionals expect not just a base salary thats in line with what other firms are offering but also a choice of benefits and incentives that are just as competitive. Many companies use bonuses as a recruiting and retention tool. If you dont, you could be on the outside looking in when it comes to top performers.VISIT THE SALARY CENTER2. Recognize the benefit of bonusesOne benefit of bonuses is they give you a more flexible way to compensate your employees than salar ies alone. Employers can decide how to structure their bonus programs and what types of bonuses theyll offer, based on individual, team or company performance - or a combination of those.Another benefit is improving staff retention. Aside from a competitive salary, professional development and work-life balance, workplace recognition is a significant strategy for keeping talented members of your team on board.Also, year-end bonuses are a great way to celebrate success. According to Robert Half research, The Secrets of the Happiest Companies and Employees, accounting and finance professionals report their biggest driver of happiness is feeling appreciated for their work.3. Communicate with employees either wayGroup meetings are fine if bonus structures are the saatkorn for all employees, but if not, you should speak individually with each staff member. If you plan to distribute a bonus, here are some suggested ways of telling the employeeHave a meeting as early as possible and discu ss the reason for the bonus. Schedule this separate from a performance review.Explain how the payment is determined and when to expect it.Take the opportunity to offer your appreciation for the employees contributions.If you wont be giving a year-end bonus, here are some suggestionsCommunicate the news as early as possible, and maintain the same sense of transparency as you convey the reason a bonus wont be given and, if appropriate, explain what the employee can do to improve the odds for a future bonus.Show compassion, care and confidence in the employees work, if its deserved.If you decide on a different kind of incentive or gift, talk about what that will be.4. Consider alternatives to bonus payIf you decide against offering year-end monetary bonuses or dont have the budget for it, consider other kinds of employee perks, such as flexible scheduling, days off, telecommuting options or a casual dress day. Throw a holiday party or a department potluck. Give baskets filled with trea ts, gift cards or company merchandise.Whatever you decide, the important thing is to keep employees in the loop and let them know your company appreciates their work and commitment - bonus or no bonus.- by Ky Kingsley Ky Kingsley Ky Kingsley is vice president of Robert Half Finance Accounting, North America. She joined Robert Half in 2007 and is an expert on career growth and development, hiring trends, and the use of social media in recruitment. She is based in the Los Angeles area.