Holiday bonuses are tricky (or nonexistent)
Although the U.S. economy is strong, fewer companies have given out performance-based cash bonuses in recent years, according to a survey by Challenger, Gray & Christmas, as reported in MarketWatch.
While St. John Properties of Baltimore recently made its 198 employees presumably quite happy with a total of $10 million in bonuses, many other U.S. workers are not so fortunate. According to the survey, fewer than 10 percent of companies planned to give bonuses to all staff based on company performance this year, vs. nearly 20 percent just four years ago. Twenty-four percent of companies planned to give bonuses to select workers.
Meanwhile, the survey showed that the percentage of companies offering bonuses of $100 or less is increasing, and non-cash gifts, such as a day off or a gift basket, are on the rise as well. In total, nearly 65 percent of full-time private workforce employees will get something.
In the retail industry, it’s long been a story of the haves and have nots, with some top execs making millions in year-end bonuses, and some store-level employees going without — or making do with a holiday party or lunch.
According to The Washington Post, the cash Christmas bonus may have begun with Woolworth’s, as early as 1899. With the busy holiday season, and workers on their feet for many hours at a time, rival stores were hiring workers with the promise of higher wages. So, Woolworth’s offered a bonus for “salesgirls” of $5 for each year of service, up to a limit of $25. The objective was to make sure that clerks didn’t leave at a time of the year when they were most in demand.
According to the Chicago Tribune, Walgreens recently declined to pay employees an annual bonus at a time when it laid off 100+ headquarters employees and made plans to close 200 stores. According to an internal memo, the lack of bonus payout was due to a failure to meet operating income targets. The chain cut manager bonuses in 2018.
According to payscale.com, the average retail associate makes $10.71 per hour, and receives a $506 bonus, plus $350 in profit sharing.
- What are you doing with your Christmas bonus? Wait, you didn’t get one? – The Washington Post
- The real reason a Baltimore company’s $10 million holiday bonus is such an outlier – MarketWatch
- Walgreens lays off employees at Deerfield HQ, scraps annual bonuses and boosts cost-cutting goal to $1.8 billion – Chicago Tribune
- Average Retail Sales Associate Hourly Pay – PayScale
DISCUSSION QUESTIONS: Should bonuses at retail be based on sales, profit or the spirit of the holiday season? How should bonuses be calibrated for management versus store-level associates?