Little seasonal cheer over Christmas bonuses

Nov 28 2005 by Nic Paton Print This Article

The majority of British workers are unlikely to get a seasonal windfall in their pay packets this Christmas, new research has suggested.

The study of HR directors by pay and benefits consultancy Innecto found 19 per cent said their company would definitely not be paying a bonus this year, with 40 per cent still unsure.

Just 41 per cent said their companies would be awarding staff bonuses.

In addition, of the 183 HR directors polled, just 18 per cent expected bonuses to be higher than last year.

Earlier this month, a global survey by HR services firm, Hewitt Associates found that the annual bonus was increasingly being replaced by performance-related incentives that must be re-earned annually.

Six out of 10 companies globally would not be dipping into their pockets this year, the Hewitt research suggested.

In firms still wedded to seasonal handouts, Innecto found the majority Ė 68 per cent Ė expected bonuses to be lower than last years, while 15 per cent said they would probably be the same.

Indicating of a lack of confidence in the economy, a key factor affecting this reduction was the general state of the economy, cited by 22 per cent of those polled.

The market in which their businesses operated was mentioned by 37 per cent, while 8 per cent blamed a change in management approach and 6 per cent their employees' own performance.

Deborah Rees, director of Innecto, said: "When profits are down, linked bonuses are obviously cut Ė but this usually creates a despondent workforce.

"With difficult times ahead, I would advise companies to concentrate on smart ways of keeping employees motivated.

"Investment in employee communication, clear career paths, constructive appraisals and positive feedback will all pay dividends when bonuses don't pay out," she added.

The research echoes a study by HR services firm Hewitt Associates in November that found six out of 10 companies globally would not be dipping into their pockets this year, although three-quarters were planning to host a party for the holiday season.

Instead of an annual bonus, it found, employers were increasingly opting for performance-based bonuses that had to be re-earned annually, it added.