Hannah Clark over at Forbes has an interesting piece on end-of-year bonuses.  Apparently, the traditional holiday bonus is nearly extinct, a fact which comes as no surprise to me given that I have never received one.  Clark reports on a study by Hewitt Associates, which found that only 34% of employers will offer holiday bonuses this year, down from 41% last year.  Most of these employers have never had a bonus program, but some have dropped their plans.  According to Hewitt, two-thirds of the companies who have eliminated bonuses did so in the last five years.  The worst part is, of the employers who do give holiday bonuses, many insist on non-helpful, non-cash rewards like food or gift certificates. While the average cash bonus is worth $837, gift certificates are worth $37 on average and hunks of meat only $24.

It may sound like these employers are just being stingy, but there really is a method to the madness.  The experts quoted in the Forbes piece suggest that bonus plans can cause workplace disharmony if they aren't administered well.  If companies give everyone the same amount, they anger the high performers.  But if they give some people more than others, they upset the low performers.  As a result, most companies are switching to performance-based compensation plans.  Bonuses aren't always tied to the calendar year, and workers might receive them on their employment anniversaries, or whenever the company's fiscal year ends. The idea is that managers communicate their expectations throughout the year, and so expectations regarding bonuses are met.

I have noticed a trend of rewarding more cash bonuses to upper level managers and executives.  Some companies call these incentives profit-sharing, and they are designed to be a perk of reaching a certain level of seniority.  But these policies leave me with a bad taste in my mouth.  After all, doesn’t everyone on the ladder do his or her part to contribute to the company’s bottom line?  Why should the rewards of strong corporate performance be reserved for those who make more money to begin with?  Seems to me that companies should be doing more to share the wealth.