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Your brain on the holidays: Pry apart the significance of your favorite traditions and learn to cope with December stress.

The Psychology of the Christmas Bonus

Christmas bonus? Motivator or big disappointment?

National Lampoon's Christmas Vacation has become a holiday classic [albeit a silly one]. The story revolves around Clark Griswold's anticipation of his hefty annual Xmas bonus, as he hosts his extended family for the holidays. Throughout the film, Clark dreams of using his bonus to build a swimming pool. Unfortunately, instead of a cash bonus, his Scrooge-like boss gives Clark a year's subscription to the Jelly-of-the-Month club.

Except for Wall Street (where huge bonuses make every year a year-long Christmas celebration), holiday bonuses have mostly disappeared. Or, they have been replaced by a company gift, party, or tickets to some event.

What are (or were) Christmas bonuses (or any sort of bonus) all about anyway? Well the answer is straightforward. It is all about (or should be about) recognition for a job well done. When companies gave annual bonuses, often around the holiday season, it was an easy way to say ‘thank you' for the year's work performance. But it was not a good process for motivating employees. To be effective, bonuses, like raises, need to be tied to specific workplace performance, they need to be substantial enough to be seen as worth the effort, and they should not be obligatory (or like Clark Griswold, employees will expect to receive a bonus regardless of their level of work performance or the company's performance).

The downturn in the economy, and a change in the employer-employee relationship (less "loyalty" and greater turnover), has, for the most part, made the Christmas bonus a relic of the past. But, for those companies who still give bonuses or substantial gifts, it's a good idea to keep in mind the basic psychology of motivation.

First, be transparent. If giving a substantial bonus, make it clear that it is tied to effective work performance. If financial circumstances won't allow bonuses, communicate that to employees, or else you will have Clark Griswold's great expectations and eventual resentment (see the movie!).

If giving a company holiday gift in lieu of a bonus, make it clear that it is just that. I've heard from dozens of employees during the holiday time - "why didn't they just give me the cash, instead of the [Jelly-of-the-Month]?!?

Instead of giving some "token" holiday gift, if employers want to truly motivate, they should demonstrate that they recognize the employee's individual effort. Personalize the gift ("Fred, I know you love to golf..." "Irma, I know you like jelly...). Be transparent ("The company can't afford much this year, but we truly appreciate your efforts, so please accept this gift..."). If the recognition is personalized and heartfelt, it will do more to make the employee feel valued, and will be motivational, than the monetary value.


Follow me on Twitter:!/ronriggio


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