Performance Bonuses Replace Traditional Holiday Payments

December 7, 2005 ( - While there is a continuing decline in holiday gifts and bonuses for Canadian workers, there has been an increase in pay-for-performance bonus plans.

In a news release, Hewitt Associates said it found in its survey that a only a third of Canadian employers will offer holiday bonuses this year, compared to 41% of US organizations. Of those organizations that do still offer holiday bonus programs, 53% plan to offer gift certificates and 38% plan to offer cash. The median cost of cash bonus is $250, compared to $40 for gift certificate/gift card expenditures, according to the release.

Fifty-five percent of companies surveyed said they never offered a holiday bonus, and 8% have discontinued their programs. Reasons for discontinuing holiday bonus programs included:

  • using the money for other bonus programs – 50%,
  • employee entitlement issues – 50%,
  • all rewards are tied to performance – 38%,
  • employees do not value it – 38%,
  • and program cost – 25%.

Of those companies that never offered a holiday bonus program, 41% never considered such a program, 35% said it was due to cost, and 15% said that a holiday bonus program was not consistent with their reward philosophy.

On the other hand,81% of Canadian organizations offer variable pay plans as a way to reward employees.

In spite of the shift away from holiday bonuses, holiday parties still remain popular for Canadian employers. Eighty-two percent of companies surveyed plan to host a party this holiday season. Of these, the median amount companies will pay for a holiday party is $26,000 or $70 per person. Fifty-seven percent of companies said their number one reason for throwing a holiday party is to say thank you and show appreciation to employees.

Copies of Hewitt’s “Holiday Gifts and Bonuses” survey can be purchased at , or by calling the Hewitt Associates Information Desk at (416) 225-5001.