Holiday Bonuses for 2019 Hold Steady or Grow at Most Firms

Over half of professionals surveyed expect a holiday bonus this year

Stephen Miller, CEBS By Stephen Miller, CEBS December 10, 2019
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Holiday Bonuses for 2019 Hold Steady or Grow at Most Firms

Many workers will receive a holiday-timed bonus as the year ends, and their bonuses will be at least as large as last year's, new research from global staffing firm Robert Half suggests.

Holiday bonuses are distinct from performance bonuses based on individual and team accomplishments during the year, which are often awarded to employees after their year-end performance review during the first quarter of the new year.

Based on survey responses from more than 2,800 senior managers at U.S. companies with 20 or more employees, Robert Half found that:

  • 76 percent of senior managers polled said their company offers year-end bonuses.
  • Of those respondents, almost all noted that their organization plans to either increase the size of year-end bonus payments (48 percent) or pay the same amount as last year (48 percent).
  • Only 4 percent of executives at companies that pay year-end bonuses anticipate reducing the amount given to employees.

Holiday Cheer

Unlike performance bonuses tied to specific metrics and goals, year-end bonuses provided to all staff "are intended to foster goodwill with employees as well as promote a positive company culture. They are a celebratory reward that benefits everyone," a Robert Half blog post explained.

Employers, however, may also offer one-time bonuses at the end of the year as incentives for employees or teams working toward a specific project or goal, the firm noted.

In contrast to performance-based bonuses, year-end bonuses "can be easy to implement and have universal appeal," said Paul McDonald, senior executive director at Robert Half. "Money still talks, especially if employers haven't been able to offer salary raises. Giving cash rewards is one way that companies can recognize staff for their hard work over the past year and keep them motivated and loyal for months to come."

In a separate survey of more than 2,800 U.S. workers employed in office environments, Robert Half found that 52 percent of respondents expect a year-end bonus this year. These workers also have plans for the extra money that include putting it toward long-term savings (52 percent), a vacation in the new year (47 percent), holiday shopping (46 percent) and paying off debt (46 percent).

A Discretionary Bonus, Usually

Year-end holiday bonuses generally are considered discretionary bonuses, since employers typically aren't required to pay them under an employment contract or collective bargaining agreement, and holiday bonuses are usually not tied to performance evaluations or incentive plans.

Unlike nondiscretionary bonuses that the employer is obligated to pay and, consequently, must include in overtime pay calculations, discretionary bonuses usually can be excluded from overtime pay.

[SHRM members-only HR Q&A: Must bonuses be included in overtime pay calculations?]

However, employers can cause holiday bonuses to lose discretionary status. For example, an employer that announces in the first quarter that it will pay a holiday bonus in the third quarter may have transformed an otherwise discretionary bonus into a nondiscretionary one, because there is now a promise to provide a bonus, subjecting the gift of holiday cash to overtime pay calculations.


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