Holiday Bonuses Beginning to Look a Lot Like Incentive Pay

Employers are dropping holiday bonuses, shifting toward showing their employees appreciation through annual merit programs that highlight company performance and values.

The tradition of the annual bonus is deeply embedded in the culture of the American holiday season, and that tradition, like many other holiday pastimes, is evolving to fit new needs.

“I’m not sure companies get all the value out of a Christmas bonus,” Steve Gross, compensation consultant and founder of SEG Consulting Group, said. “It creates a form of entitlement.”

Shoppers line up to pay for Christmas purchases at the KeDeWe department store in Berlin, Germany.

Photo by Adam Berry/Bloomberg via Getty Images

According to Bloomberg Law’s 2018 survey of about 350 human resources managers, 38 percent of employers plan ...