How about Christmas bonus? Lean reward for lean time is not a bad move

If we want to bore you, we will start this text with an analysis of the word reward. Indeed, when we follow its historical development, we cannot fail to notice how long “currency” carried the meaning of “thanks” (for example, in Greek) or “things in common” (in Latin). However, we will not tempt your attention, so we will start with a declaration: A Christmas reward is not a necessity. It is not your duty to give it to her. The thirteenth salary that lands in the account as a “reward” will never automatically do as much as a sincere handshake, a thank-you and a fifty-dollar shout-out. Precisely because the reward should combine gratitude and things in common, as history has put it into the meaning of the word.

The origin of inflation

Many managers are clear about Christmas bonuses. “I have to give high rewards to people, I have to compensate them for inflation”. And they can be understood to some extent. But let’s be honest about how this inflation happened. We are now at the end of a multi-year growth era that brought, among other things, very cheap money. They were rolling everywhere. And that inflation – excess – very often transferred to the level of employer-employee relations.

It is such a paradox of the times that people began to be often overpaid for work that had no real value. Few people were able to evaluate its benefits – there was no need, after all, when something went wrong, it was easy to borrow and move on. And all financial and non-financial rewards followed a similar wave. They became a flat-rate tool, which in many cases became completely empty.

A well-known rule is that most people could live happily even on a significantly lower wage if everyone around them had it. And it is also true that if everyone around gets an increased salary – like we do, the effect of satisfaction does not occur. And here we have a beautiful example of the inflation of an important benefit. Rewards that have ceased to be rewards because they do not trigger in a person what we expect from them. On the contrary, it becomes a trap. Because how do you reward someone who treats compensation as a non-negotiable standard?

Why spoil the end of the year? A well-spoken truth can turn him on the contrary…

But this time is slowly coming to an end. And one almost wants to say “fortunately”. This year’s Christmas rewards have a chance to fulfill their purpose years later. However, things look a little different on the market so far. Companies are driven by inertia and very often want to pay out bonuses head-on. Extensive, maximum variability within the department. And this even in the case when the performance of the company and its employees translated into the set KPIs or OKRs definitely does not correspond to positive scenarios. Why spoil the end of the year.

But as paradoxical as it may seem, the end of the year is certainly not a bad time for teams to learn that the party is over. When bosses meet several conditions:

• For the teams, this message will not be shocking, because they have long-term enough transparent information about the overall situation in the company
• It will not be a thing that is done from the table, but sensitively and with a clear communication plan
• Teams will have a chance to tell someone what they have to say, and someone will listen to them. Proof that people care must follow a similar message
• People will learn a clear plan and will know according to which scenario the rewards will change

So what to give and what not to give rewards for?

If you are thinking about Christmas rewards, first of all it is absolutely crucial to internally define what goal they actually fulfill. If in the end you decide to stick to the very essence of the word and really “reward” your employees, it is appropriate to avoid, in particular, so-called rewards for loyalty and the fulfillment of a normal work standard. This category includes all rewards for flawless attendance, on-time arrivals, reliability… In short, attributes that should be part of the basic prerequisites for employee performance and for which people are rewarded within the salary, not within special categories.

What, on the other hand, directly calls for a reward is the above-standard performance of employees. Just to be clear, we don’t mean people who voluntarily spend more time at work than necessary or take on an excessive amount of tasks. We are particularly referring to employees who want to advance themselves and their own projects, are looking for new solutions and methods, and enjoy their work. Although such employees are not the majority, they are the people who, as a result, have the biggest share in the company’s shifts. And he certainly deserves to be rewarded.

How high should the Christmas rewards be?

Very often, in a lot of clever texts, you will learn about the thirteenth salary or bonus, which is based on the idea that the reward is something that simply automatically belongs to the employees. In an effort to maintain an equal approach to remuneration and not make differences between individual employees, so that there is no unnecessary tension in the pleasant pre-Christmas atmosphere. In reality, however, it is primarily this approach that ultimately causes the air at a company party to thicken. According to these rules, people who worked conscientiously and did many times more work than their position would have required will receive the same reward as employees who simply went to work normally. And admit it yourself – what is fairer?

The amount of the reward cannot be determined other than individually. It then pays off methodically:

• Set bands for individual rewards, their specific range can change dynamically based on the total rewards budget.
• Each reward should have components that can be interpreted by the employee
• The minimum amount should depend on whether the reward is an “enhancement”. or by evaluating a year’s work. In the second case, the amount must make sense compared to the salary even after budgeting for the whole year.
• For the maximum amount, think about whether it is a good idea to exceed 50% of the recurring monthly remuneration. One extra salary logically leads the employee to think whether it is better to get a salary increase and a smaller reward at the end of the year.

What should the Christmas reward consist of?

Clear feedback and evaluation of the year’s work. Diplomatically, without embellishment, but with full respect for the employee. It is best if you just summarize the previous “ongoing” feedback from the year. If you do them. If not, you should.

Expressing gratitude. This will likely be a two-way street. Believe that the common human gesture of “We’re really glad to have you” is often the most important essence. As with feedback, a one-time compliment will be less authentic than one communicated at any time during the year, when it only makes a little sense.

Reward for performance. Clearly state why and to what extent we appreciate the employee’s above-standard performance. He must understand that he receives his reward precisely in his bond.

Reward for results. If the company has achieved remarkable results, it can also include a paid share of them. Again, the employee must clearly distinguish what he is getting paid for.

Space for open dialogue. This too should be a reflection of mutual respect. It is natural that it does not always have to be just a formal conversation, but long unresolved problems and grievances may begin to surface. However, even this “clearing the air” before the holidays – if I’m counting ahead – will benefit both parties. And again. If the open dialogue is part of the “daily routine”, the annual evaluation and interview will have a completely different weight.

Know your worth

Without wanting to be too ambitious, we believe that reducing rewards to bonuses for employees whose performance is above standard will ultimately benefit everyone.

Rewarded employees will see that the company they work for registers them and perceives their abilities and efforts. If each awarded employee knows that the bonus really belongs to him and serves as a reward for the steps he has taken, his loyalty to the company will increase and his willingness to move on will not fade.

Employees who did not reach the reward will have the opportunity to reflect on why this happened. And ideally with support in dialogue with a superior. Thanks to this approach, many people can end up with mediocre work performance, perhaps because they simply do not see their future in their current position. If you really have an open relationship with your people, you’ll know about it much sooner than the Christmas conversation. Preparing for a change of position is not a one-week event. It takes time.

This is ultimately right for the company as well. Any company will move forward only when it can rely on people who truly believe in its vision. If a company is to have real value, it needs people who see meaning in their work.

Don’t be naive about what?

You do not hide disproportionate remuneration. People will talk about him anyway. Therefore, communicate in advance what criteria you choose for remuneration and why. Communication in this regard must be straightforward – the goal is for employees to understand that the starting line is the same for everyone and that they all have the same potential to achieve the reward.

For companies with a more open culture, which discuss salary issues openly in the long term, the possibility of transparent thanks for the performance in front of the joined unit is offered, while the amount of remuneration for the given employee can be indicated to everyone.

Set rewards soberly. Bonuses generally have two components – a reward for the performance of a specific employee and then a bonus that people receive in proportion to how well the company is doing. Given the situation, it can be expected that most companies will choose the first option this year, but even in the case of the second one, one must be cautious and look at the amount of bonuses through the lens of the expected future development.

I’ll see you later

However, your year-end planning should not end with the distribution of Christmas rewards and a Christmas party. The impact of your actions will affect a number of employees by mid-afternoon. Over Christmas, they will intensively discuss the employment situation, many things will come to mind – either positively or negatively. And in midday it is not possible to deny ourselves to the blocks and pretend that we are all agreed, rested and satisfied.

Therefore, January should be in the spirit of a sensitive reminder of all the key moments of newly set relationships and standards. And it should at the same time contain space for further continuation of the dialogue. Because if someone starts work in the new year demotivated, they burn out more easily, succumb to the feeling that their role does not matter, or begin to wonder where last year’s snows actually are.

And then you can choose whether you prefer “kitchen fights” that can reach the level of unspoken threats and ultimatums or people who feel that their future has died with the thirteenth salary.