Hey, boss — don’t Scrooge around with those bonuses

Brian J. O'Connor
Detroit News Finance Editor

Bosses of America, let’s talk about money. Specifically, holiday bonuses and why, as the Internet says, “You’re doing it wrong.”

Now, I don’t really blame you for mishandling bonuses because you have such poor holiday-time role models. You’ve got Scrooge, you’ve got the Grinch and you’ve got old man Potter, who all set bad management examples, so let’s clear this up: When Clark Griswold’s boss makes Clark’s annual bonus a subscription to the Jelly of the Month Club, you’re not supposed to think that’s a good idea.

When it comes to holiday bonuses, a survey from recruiter Accounting Principals finds that 67 percent of you will hand out cash awards to your faithfully scrivening Bob Cratchits. That’s good, but it’s often the way you award these bonuses that makes them feel like a lump of coal.

Such as: 15 percent of you are giving bonuses of $99 or less.

I’m sorry, but the word for that is not “bonus.” It is “tip.”

Extra check, please!

Good bosses — a species becoming as rare as the passenger pigeon and as fictional as Fezziwig — are handing out $1,000 or more. If you’re grossing that up to cover taxes, so that anyone who gets $1,000 gets it as take-home pay, great. And if you’re a really good boss, you’ve made it clear what the people who work for you needed to do to earn that bonus.

At some companies, that’s nothing, because annual bonuses are a kind of profit-sharing — if the company makes money, everybody gets an extra paycheck in December. If it’s a bad year, that’s reduced or eliminated. The only improvement I can suggest is issuing separate paper checks so your workers can cash them without having to tell their spouses.

In other cases, a bonus is part of the compensation plan for workers such as sales reps. That system is automatic and everyone involved knows what their targets are to trigger the extra cash. Supervisors, managers and others get specific written annual objectives to earn their bonuses. This is a time-honored technique borrowed from puppy training: Roll over, get a cracker, although I’ve worked for several supervisors who not only would have gone hungry under that reward system, but also would have starved to a certain death.

Then there are you bad bosses, who randomly dole out cash to your office favorites, or to staff members you value so much that you won’t give them a raise, just an occasional and bewildering temporary bump. This is appropriate only if that employee went above and beyond in a specific situation, like bailing out the office after it flooded on a Sunday or driving to Dayton for an emergency toner run.

Otherwise, you’re like some small-time mobster greasing the palm of an underling. “Yo, Paulie, nice job dis year. Getcha self a new set of snow tires there.”

Go down in boss history

Listen, bosses: If you want to motivate your workers with money, set up clear, specific measurable objectives to earn either a raise or a bonus, and know the difference between the two. Any man or woman on your staff doing routinely good work all the time deserves more than a seasonal gratuity and should get a real raise. These people are professionals, not parking lot valets.

So, bosses, let’s review, applying what we’ve just learned to another Christmas classic:

■Rudolph the Red-Nosed Reindeer guided you through the unexpected and dangerous foggy night and saved Christmas. Bonus.

■Prancer, the reindeer supervisor, kept the team on task all year, even during the whole Comet and Cupid thing, and found a new vendor to handle the reindeer games, reducing costs by 15 percent. Raise.

■That upstart holiday Festivus stole your market share, knocking Christmas demand off by 12 percent and leaving year-end results for Santa Claus Inc. neither holly nor jolly. Gift cards to all.

■Demand for Christmas was up on 18 percent more stockings hung with cheer, giving SCI another great year. Extra cash for everyone, plus sushi and open bar at the elf party.

Follow these guidelines and, when it comes to bonuses, you can give the people who work for you a wonderful life — not a nightmare before Christmas.


Twitter: @BrianOCTweet

Scrooge or Fezziwig?

Here’s what bosses are handing out for holiday bonuses this year:

15% …$1-$99

46% …$100-$499

18% …$500-$999

21% …$1,000 and up

Average bonus …$858

Average big firm bonus …$1,072