Handing out end-of-year bonuses can be a confusing decision for business owners. The desire to reward top performers can conflict with attempts to make everyone at the company feel valued, and bonuses can strain the budget. But, handled well, bonuses can boost morale and give employees added incentive to contribute while at work.

Keep these tips in mind to make your employee bonus process (relatively) painless:


If your firm has handled holiday bonuses the same way for years, your staff will have expectations about how they’ll be handled in the future. A sudden change can upset staff who feel like they have worked just as hard this year as in the past. So, consider the traditions you start and find a thoughtful way to tell employees ahead of time if your firm will have to change how it gives bonuses in the future.

Also be consistent across your team. Some firms choose to give performance-based bonuses, others to reward everyone based on their level in the company or years of service. The dollar amounts of bonuses won’t be the same for every person in the firm, but the rationale for each number should be. Avoid giving some people bonuses based on performance and others bonuses based on a percentage of their salary.

Budget and Alternatives to a Check

It should go without saying, but make sure that your firm can afford to give the bonuses it is considering. As much as employees want their holiday bonuses, they are also invested in your firm remaining profitable. If you can’t afford to give cash bonuses this year, consider other options that your employees will value, such a extra paid time off if you can afford that. Avoid cheap trinkets that will make you seem ungrateful for the staff’s service. Be careful if giving food or drink as gifts: a fancy bottle of wine may only offend an employee who does not drink, and a gift certificate to a nice seafood restaurant will be worthless to a staff member who can’t eat fish.

Include everyone

Bonuses for the attorney who has worked for your firm for 25 years and the administrative assistant you just hired won’t and shouldn’t be the same, but both people should be included on your bonus list. Giving holiday bonuses to some employees and not others can make your staff resent each other.

Remember, how you handle bonuses will impact how your employees view the firm. Making a good impression is part of maintaining a happy staff who will stay with your firm for years to come.