Bare Bones Business: The Dark Side of the Holiday Bonus

Egads! It's that time of year again - holiday bonus time. It starts out with the best intentions. Then it gets weird.

Todd meant well when he started giving Christmas bonuses four years ago. It had been a pretty good year for sales and profits. And he had been meaning to give bonuses to his plumbers - Sam, Ed and Joe - for quite a while. Also, Joanie, his administrative go-getter, deserved something for her loyalty and hard work. Todd cut hefty checks and basked in the thanks from his surprised and delighted team.

The next year, the team wasn't about to be surprised. They started dropping hints, especially Joe. He talked about using the bonus to get caught up on credit card bills. He asked, in a polite way, if Todd would deliver the bonuses before Thanksgiving because he was planning a trip to his brother's home up north. Todd cut the checks.

Year 3, Joe approached Todd in October and started in on the Christmas bonus. Was Todd aware that Joe brought in more sales than Sam and Ed? Wouldn't it make sense for Joe to get a bigger bonus? Todd explained to Joe that the bonus checks were going to be smaller this year because a big commercial customer had gone out of business. Profits were slim. Joe stormed out of the office.

Todd felt sick to his stomach as he cut checks for the team, a slightly larger one for Joe. Sam, Ed and Joanie didn't even thank him when they found their checks in their inboxes.

Now, what about this year? Joe is pretty frustrated and has been grumbling about Todd, the economy and this year's election. "Joe the Plumber" just might start his own business.

What's Todd to do?

How about you? You want to do the right thing. You want to let your team know you love them. But maybe you are stuck with an ever-increasing, certainly expected, not really appreciated holiday bonus.

If you have been giving a holiday bonus since who-knows-when, you might as well give it again this year. It's expected and probably already committed to layaway items at the mall. So check your cash flow, and cut the checks.

Then plan a better way to pay for 2009. Update your business plan. Clarify your mission and vision for the company. Set goals, and ground those goals in your 2009 budget.

Consider how to reward the behaviors that help you and your team move in the right direction. Think about how to let your team in on the score - and how to hold them accountable for hitting the numbers and performance standards. And if they exceed goal, consider how they could earn a bonus. That's the way to reward those who go above and beyond without shooting yourself in the foot financially.

After this year's party, after the bonuses have been spent, let your team know that you are going to revamp the way you pay in 2009. Those who produce will be rewarded. Those who need help will get it. And the willing and able will win.

Take your time. Six to nine months is a good time frame for exploring, planning, testing and implementing a new way to pay and play at your company.

And for the holiday bonus in 2009? Give each team member a heartfelt, "Thank you!" and a $25 gift certificate to Amazon.com or Target.

Best wishes for getting the weirdness out of next year's holiday season.

Ellen Rohr is an author and business consultant who offers systems for getting focused and organized, making money and having fun in business. Her latest book is "The Bare Bones Biz Plan." She can be reached at ellen@barebonesbiz.com.