Chevy Chase hides behind the tree in a scene from the film ‘Christmas Vacation’,
“Thanks for telling us. I was expecting a check and instead I got enrolled in a jelly club. Seventeen years with the company – I’ve gotten a Christmas bonus every year but this one. You don’t want to give bonuses, fine. But, when people count on them as part of their salaries . . . what you did, [sucks.]”
By most accounts, 2019 was a banner year for American businesses. Earnings are at all-time highs in many industries and the stock market reflects optimism.
Do you want to know how flush companies are? Take a look at holiday parties and bonus pools.
St. John Properties, a commercial real estate firm, surprised 198 employees with a $10 million bonus at the annual holiday party. Bonuses were awarded based on tenure, with an average employee netting $50,000.
Company chairman Edward St. John noted that, “Grown men were crying. It was an unbelievable moment.” Indeed.
Outside of real estate, the mortgage business seems to be healthy. Quicken Loans made 18,000 employees happy, with a $600 cash bonus plus a $600 gift certificate to Shinola for every team member.
Not to be outdone, United Shore Financial Services, another mortgage company, handed out 13 Cadillac’s and 30 cruises to the Bahamas at an extravagant holiday party that featured entertainment by The Chainsmokers.
A survey conducted by Challenger, Gray and Christmas, found that 66% of employers plan to award employees with a holiday bonus this year, up from 50% in 2018.
In publicly traded companies, this is especially good form, where senior executives have reaped the rewards of rising stock values.
What If Your Business Is Not As Fortunate?
In large part, people derive their happiness on a relative basis. If you have the nicest house on the block, you might feel fortunate. Move three blocks away to a more expensive part of town and that same house might make you feel relatively poor.
Some people are fortunate to work for a company having a great year, others are not. You might work for a company that shares during the holidays, or you might work for one that shames you into attending a lame holiday party as your “gift.”
What matters is how leaders set expectations. When a business is struggling, one tendency of a manager is to shelter the team from reality.
Some leaders worry that sharing too much about the company’s difficult predicament might scare some people into leaving. They might find that candor will have the opposite effect.
By sharing an honest assessment of the company’s financial condition, the team will feel like they have inside information. They might act more like owners and double their efforts to help the company.
If you have delivered a holiday bonus in the past, understand that your team is expecting another.
In the movie Christmas Vacation, Clark Griswold spends his bonus on a new pool for his backyard, before he receives it. When he finally gets his “bonus” of a jelly club membership, all hell breaks loose.
My guess is that most people would take the jelly club over giving up a Friday night to hang out with co-workers.
Next year might be another banner year for St. John Properties. If so, 198 employees will have an expectation that starts at $10 million in bonus money. Anything less and people will leave the 2020 holiday party disappointed.
Imagine giving $8 million out to employees as the owner of a private company, only for your team to come away disappointed. Such is the reality of continuous reinforcement versus intermittent.
If Quicken Loans sets another revenue record in 2020, will employees expect anything less than a $600 cash bonus and a watch? You know the answer.
One bonus is a major motivator. The second becomes an entitlement.
When the market does slow down, these companies will need to start setting expectations early in the year. Their owners can share the challenges in the market and start the conversation of shared sacrifice.
This would be a good time to reset expectations early enough in the year that people can adjust their spending.
Ignore this advice and you might find yourself being abducted by cousin Eddie in the middle of the night to explain yourself.
To follow Ian’s regular newsletter on team building and management, connect with him at 5on4.group.