Many Firms Not Giving Holiday Bonuses

Dalton, GA, Dec. 28--Has the holiday bonus taken a holiday? Whether it's extra cash, gift certificates or a fruit basket, the holiday bonus has been a way for employers to tell their employees "thank you" for a year of hard work, according to the Dalton Daily Citizen. But with the national economy stuck in a slump for much of the year, some businesses have decided to cut costs and scrap the tradition. Smaller companies are more inclined than larger companies to give workers a holiday bonus, said Marilyn Helms, a business professor at Dalton State College. "With a smaller company, I think they have more discretion and you see a tighter link between work and actual performance," Helms said. "In a big company, when you have someone working out on the line, you may not be able to tell exactly what they did. With a smaller company, the impact of the worker on the bottom line is so much clearer." Some larger local companies haven't been giving out holiday bonuses in recent years. Beaulieu of America stopped its bonus programs three years ago, according to a newspaper report at the time. Company officials didn't return phone calls from The Daily Citizen this week. Dalton-based Shaw Industries doesn't give the majority of its 30,000 employees bonuses. Calhoun-based Mohawk Industries officials could not be reached for comment. But these companies aren't alone. Nearly 65 percent of national businesses will not offer a holiday bonus this year, according to a study by Hewitt Associates, a human resources outsourcing and consulting service based in Illinois. But the number of businesses using pay-for-performance plans, which reward employees for their actual work, have increased from 51 percent in 1991 to nearly 80 percent in 2003. "Companies continue to move away from entitlement awards to awards based on performance," said Ken Abosch with Hewitt Associates. According to Hewitt's study, 47 percent of companies surveyed have never offered a holiday bonus while 17 percent canceled their program. Of those organizations that canceled their holiday bonus plans, 52 percent did it between 2000 and 2003, and 42 percent did so in the 1990s. Companies said they cut holiday bonuses due to cost, workers believing they are entitled to a holiday bonus and the development of the pay-for-performance plans. Because economic strains on businesses have caused some to cut back on personnel, employees often times put in extra hours to compensate for those open positions, Helms said. "We're asking people to do more, so I think toward the end of the year employers that can do bonuses, particularly some of the small businesses, have looked around and seen how hard their employees have worked all year and want to reward them for that," she said.

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