Holiday Bonuses: The Downside
It’s almost holiday bonus season! That glorious time when we push ourselves to be the best employees we can be, to earn that coveted “thank you” check. Right? Maybe not.
A few years ago, I overheard a part-time technician commenting on her holiday bonus check. I’ll spare you the details, but the gist of it was: What am I supposed to do with this dinky sum? I have heard that sentiment many times since then. While most practices give holiday bonuses to show appreciation for their staff, the bonuses themselves are not always appreciated.
So I’ve been wondering: Why give holiday bonuses when the money comes straight from the practice’s profits, and employees seemingly don’t accept them in the spirit they are given?
The fact is that many employees view holiday bonuses as a component of their income. In many practices, it has become an expectation and a habit, albeit one rooted in acknowledgment of a simple truth: employees want cash gifts at the holidays more than anything else. In 2011, Harris Interactive surveyed more than 2,500 employees in various industries about what they wanted from employers during the holiday season and 72% listed a cash bonus as their top choice. Salary raises were the second most popular choice (62%), followed by paid time off (32%), and grocery gift cards (23%). Holiday parties, which many veterinary clinics give instead of a bonus, were unpopular (4%), even if they included an open bar.1
Holiday bonuses may be at the top of staff wish lists, but practice owners may not be thrilled about what they get in exchange—these holiday bonuses appear to do little or nothing to motivate employees to perform better. Behavioral analysts call bonuses “fixed-time schedule” reinforcement, meaning that employees get positive reinforcement just for the passage of time, not for their performance or goal accomplishment.2 When we think about the accomplishments veterinarians and staff should be rewarded for, isn’t the mere passage of a year setting the bar a bit low?
Behavior experts also point out that holiday bonuses are too infrequent to drive sustained change and because they are not tied to any specific behavior, they do not act effectively as positive reinforcement.2 Also, numerous studies have shown no positive correlation between bonus size and recipient productivity,3 so large bonuses don’t spur performance improvements any more than small ones.
Accordingly, holiday bonus programs are becoming much less common. A 2005 survey found that many companies were discontinuing their holiday bonus programs, citing cost and entitlement issues (ie, employees considering the bonus as part of their compensation) as the most common causes.4 The survey also found that many of the companies were replacing holiday bonuses with performance-based bonus programs.
Workplace behaviorist Dr. Aubrey Daniels offers these tips to create a successful positive-reinforcement bonus program.2
1) Make it personal. Not everyone is motivated by the same things. Some staff members will gladly trade financial bonuses for time off, favorable work schedules, or educational opportunities. Find out what motivates individual staff members and use the knowledge to drive that person’s performance.
2) Make it contingent. To be effective, bonus systems must clearly relate rewards to behaviors. Bonuses must be earned, so clearly define the behaviors that deserve rewards.
3) Make it immediate. We all work with animals, so we know this: People naturally correlate rewards with their actions at the time of the reward. Positive reinforcement, whether it’s praise, gift cards, or a pay raise, should relate to the desired behavior.
4) Make it frequent. Long-lasting changes in behavior require lots of reinforcement. Small rewards given frequently will have a more lasting effect.
Meanwhile, if you’re one of those employees who still receives a holiday cash bonus, the best thing you can do is acknowledge its meaning and show your appreciation, whatever its size. “Thank you” goes a long way toward spreading holiday cheer.
1. Employees want a bonus, not a holiday party. Smith J. http://www.forbes.com/sites/jacquelynsmith/2011/12/09/employees-want-a-bonus-not-a-holiday-party/. Posted December 9, 2011, accessed September 2012.
2. Oops! 13 Management Practices That Waste Time and Money (and What To Do Instead). Daniels A―Atlanta: Performance Management Publications, 2009.
3. Individual monetary incentives: A review of different types of arrangements between performance and pay. Bucklin B, Dickinson A. J Organ Behav 21:3, 2001.
4. Holiday bonuses: A fading tradition. Marquez J. Workforce Management 84:14:12, 2005. http://www.workforce.com/article/20051222/NEWS01/312229991. Accessed October 2012.