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The end-of-year bonus dilemma: a guide
Christmas is a minefield. The list of pitfalls includes optimistic expectations of extended leave, complaints about the quality of the food at the Christmas do and Ian from accounts and his proclivity to photoshop his genitals onto the firm’s Xmas card.
But by far, the most incendiary work bomb in the festive problem arsenal must be the end-of-year bonus. If you're envisioning a windfall comparable to a lottery win, it's probably time to realign your expectations. In this ‘end of year bonus’ blog, we’ll share some of Laughology’s thoughts on fairness, how to ask for more and when to keep shtum and be grateful.
Bonus facts
Firstly, let’s get the facts out of the way. A ‘holiday bonus’ is a discretional gift of monetary value that a company gives to their employees around the holiday season. There is no fundamental requirement or statutory obligation in the UK for businesses to pay people a holiday bonus, but an employee may expect one, depending on the terms and conditions of their contract.
In fact, a shocking 53% of companies did not pay a Christmas Bous in 2022. Different types of bonuses exist, too; the main ones are flat-rate bonuses, where a company will pay a flat rate to all employees. Recognition-based bonuses are often linked to goals achieved, and profit-based bonuses are based on how well the company does. It’s common for different departments and individuals in organisations to have different types of bonuses, so don’t be surprised if this is the case with you.
What constitutes a 'fair' end-of-year bonus?
In assessing your own eligibility for a bonus, honesty and self-reflection are key. Ask yourself, have you truly gone the extra mile in your role? A bonus is often awarded for not just meeting but exceeding expectations. What’s fair? Are you being awarded on merit or has everyone got an across-the-board reward?
If you get more than Janet and Janet finds out, will she hate you, should you admit it? Will you get money or an Amazon voucher? One firm I know, and which will remain nameless, gave all its people £20 vouchers to spend in the brand’s own online store…
When considering what a 'fair' bonus looks like, it's essential to approach it with a realistic mindset. If you're dreaming of a lotto-sized windfall, it's probably time to realign your expectations. Think of the end-of-year bonus as a Christmas gift rather than something performance-related and pegged to your wages.
A bonus is often awarded for not just meeting but exceeding expectations. This is where the concept of discretionary effort comes into play. Discretionary effort refers to the additional input you put into your work that goes beyond the basic requirements of your job description. It’s about taking initiative, contributing innovative ideas, or providing support that surpasses your usual responsibilities.
Should the quality of your work be considered for a bonus?
However, while striving to demonstrate this extra effort, it's important to maintain a balance. It's not just about working longer hours or taking on more tasks; it's about the quality and impact of your contributions. How have your efforts added value to the team or the company? Have you helped achieve critical goals or solve significant problems?
Equally important is ensuring your efforts are noticed, but without resorting to boastfulness or being overbearing. It’s a delicate art to make sure your contributions are visible to those making decisions about bonuses. This might involve periodic discussions with your manager about your achievements, participating in team meetings where you can showcase your work, or finding subtle ways to highlight your successes without becoming the annoying show-off that might get a bonus, but no one wants to help you spend it.
Ultimately, a fair bonus is a recognition of performance either individually or collectively as a team. Therefore, be realistic and honest with yourself about your performance. If you've genuinely gone above and beyond, you’re more likely to find yourself in a strong position when bonus discussions arise.
Is it rude to negotiate a higher bonus?
It was okay for Oliver Twist, right? So why can’t you take your manager aside and ask, “Please, sir/madam, can I have some more?” There’s a fine line between greed and genuinely feeling you deserve more. It helps to know the basis on which the bonus was awarded, and sometimes, you need to look at the situation in context.
Has the organisation made significant investments in the year that benefit everyone, but that means profits are impacted, for example? Have costs and wages risen? If you do genuinely believe your contributions and the demonstrable impact you've made haven't been fully recognised, it's reasonable to address this with your manager. Be sure to talk through effort and behaviours as well as data, as this can give a more rounded picture of the work you’ve done.
When approaching such a conversation, it's important to do so with modesty and respect. Don’t be accusatory, and don’t demand; use tact and sensitivity. Prepare your case with clear evidence of your contributions and their impact, and present it in a manner that’s respectful of both your own work and the company’s policies and practices.
What happens if your colleague receives a bigger bonus than you?
It's generally considered rude to delve into the specifics of your coworkers' bonuses, much like asking someone their age or weight. Be aware that you’re also asking someone about their personal data, which could be seen as an HR issue, so delve with care. If you are brave/stupid enough to go there and then question why some of your colleagues may have received more than you, be brave enough to hear the answer. It might simply be that they are more deserving because of the quality and value of their work.
How to handle a disappointing bonus
What if your bonus didn't meet your expectations, or you didn’t get a bonus at all? It's disappointing, but don't let it spoil your Christmas. There’s likely a good reason, and remember that it’s just a small element of your year.
Enjoy the break, rest, have fun and return to work with a positive attitude. Maybe have a chat with your manager with a fresh pair of eyes in the new year and agree on some goals that may be bonus-related in the future.
Laughology’s CEO, Stephanie Davies, is one of the UK’s leading voices in happiness and engagement in organisations. She has an unsurpassed reputation for designing and delivering interventions for top-performing teams across a range of sectors and has developed Laughology into the nation’s most talked-about training and development provider. She also has the smallest little fingers of any human being, ever, and can often be seen walking a cat on a lead in the Surrey village where she lives.
