WHAT TO DO ABOUT THE CHRISTMAS BONUS


One of the most well-remembered Christmas movies show-casing the dilemma of a bonus at the holidays has to be National Lampoon’s Christmas Vacation. Character Clark Griswold is the corporate grunt who is so sure he will get a Christmas bonus he puts a non-refundable deposit on an in-ground swimming pool for his family.

However, Griswold discovers on Christmas Eve—when his bonus arrives a few days later than usual—that instead of giving him money, his employer has enrolled him in the Jelly-of-the-Month Club. That’s quite the letdown and Griswold lets his disappointment be known in no uncertain terms.

As Clark Griswold points out in the movie, many employees, especially those with children, depend on the Christmas/year-end bonus as part of their compensation or for holiday shopping. Unless a year-end or holiday bonus is negotiated or offered as part of the compensation package, bonuses are discretionary. There is no obligation by the firm, nor should there be any expectation by an employee, to give or receive a bonus. Yet there is often an expectation and sometimes apprehension by the employee wondering if they will receive a bonus from the firm.

There is no one-size fits all formula for giving your law firm employees a Christmas bonus. The economy has affected law firms large and small. Reduced revenues affected by alternate billing practices stemming from clients demanding value for their money has affected the year end Christmas bonus to a great extent. Plainly put, law firms are really feeling the pinch in recent years.

The precedent that exists in many firms, especially for timekeepers, is that Christmas bonuses have gone the way of pay-for-performance bonuses. The equation for calculating these bonuses is based on the revenues generated by the billing timekeeper. Many law firms no longer can afford to reach into the coffers and give bonuses which are not tied to some kind of performance review. When this type of bonus is the one offered by a firm, funds are often not distributed under February or March of the following year as calculations of income, expense and profit/loss are involved in these types of bonuses.

No matter what the circumstances of your firm, don’t totally be a Scrooge and ignore the holiday season or the contributions that your employees have made to the success of your law firm.

Here are some options that will let your employees know their work is appreciated regardless of what your budget is:

1. Give a gift card. This can be especially thoughtful if you give a card to a store or a website that you know your employee frequents or one that can be used anywhere that is the equivalent of cash.

2. Give a week’s salary. Even if the budget is tight, a week’s salary for each employee is something you can make part of your annual budget avoiding the last minute scramble to come up with a week’s salary for each employee.

3. Close the firm for the week between Christmas and New Year’s. Unless there is an emergency usually by the 22nd or 23rd of December things have slowed down as your clients on focused on their own families. You can either arrange for a skeleton crew of 1 or 2 on a rotating basis 1 day during the holiday, or forward the phones and have someone check emails.

4. Have a holiday lunch and then give employees the rest of the day off to finish their shopping and other holiday preparations. Things get so hectic at this time of the year everyone will appreciate a few extra hours to get things done.

Finally, if your firm does distribute any kind of cash or pay for performance bonus, try to distribute it a week before Christmas. With the economy being what it is, many employees wait to do their Christmas shopping until they get a bonus (hoping that they will get one), so if possible distribute it a week before December 25th. Your employees will appreciate it.

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