In a December study, the human-resources consultancy Mercer L.L.C. found the U.S. has among the lowest statutory levels of “holiday entitlement” for paid time off.
Some stateside might be thinking there ought to be a law governing holiday bonuses for the time they put in.
Since 2007, the percentage of companies that do not award year-end bonuses or perks has shot from 28 percent to 43 percent, according to a small straw poll published in mid-December by Chicago-based Challenger, Gray & Christmas, which consults on an array of human resources issues.
While the economy is one likely culprit, Challenger, Gray & Christmas said some companies may have found that year-end bonuses are not the morale booster they once were and that there are more effective ways to reward high performers, while increasing the morale and loyalty of all employees.
“It doesn”™t have to be a Wall Street sized bonus check,” said CEO John Challenger, in a prepared statement. “Many workers would be happy with a $25 gift certificate to a local restaurant or store. Many would probably be happy with an extra day or two of paid vacation at the end of the year. Many are simply happy to have a job in this economy.”
While large public companies are flush with cash, that is not the case for the large number of companies with fewer than 100 workers on the payroll. In Connecticut, companies are faced with several additional costs entering 2012, including higher taxes and a new mandate forcing companies with more than 50 employees to provide paid sick leave, a benefit not offered by many companies in the hospitality industry and others operating on tight margins.
Particularly in Fairfield County and other tristate area suburbs, year-end bonuses contribute a significant percentage of overall compensation for workers in the financial industry ”“ and so are closely watched by luxury retailers and others assessing their ability to win business in 2012.
Opinions differ on the direction of Wall Street bonuses for 2011. According to a compensation survey by consulting firm Johnson Associates Inc., Wall Street bonuses could shrink 20 percent to 30 percent. That still means the average managing director will take home about $900,000 in year-end bonus money, down from $1.2 million a year ago. In October, New York state”™s comptroller similarly predicted smaller bonuses covering 2011, following what he said was a 7.5 percent decline a year ago.
According to a survey by Towers Watson, however, six in 10 companies will pay executive bonuses at least as large as those awarded in 2010. More than a third of board compensation committees overrode their executive incentive plan formulas in the financial panic of 2008, but just 13 percent polled by Towers Watson indicated they would do so this year.
“The complexity of today”™s executive incentives, combined with the fact that the timing of incentive payouts and performance can vary between different forms of pay, really puts companies under the gun to make sure they have a clear and compelling rationale behind their programs,” said Doug Friske, global head of executive compensation consulting at Towers Watson, in a written statement.
