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Practice Tip - The Christmas Bonus

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12th Dec 2005
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I hate paying Christmas bonuses. Please don't get me wrong. I'm not a complete Scrooge. It's just that they cause so much stress. For years I paid bonuses and not a word of thanks was heard. If I'm honest, that annoyed me and did not engender that goodwill spirit supposedly associated with this time of the year.

But this isn't surprising. What do you do? Pay the same to everyone? In that case, what's the point? Cash is always a poor present.

Do you link them to targets? If so, why pay them at Christmas when you haven't got the time to undertake the reviews because you're bogged down in tax work?

If they are performance related, why pretend they're related to the spirit of goodwill at Christmas when they have, in fact, been earned?

My answer, in the end, was simple. Bonuses were performance related. They were discussed and agreed in October. They were paid in November (which is more useful than December) and the issue was out of the way before Christmas arrived, but the staff had the cash if they'd earned it at a time when they needed it.

Then it was time to give a present to staff. This usually was a bottle of booze that it was known they liked, or some decent wine. This too, I learned a lesson on. Better to give something decent than more of something cheap. A present is meant to spoil the recipient. A case of £3.99 wine is worth less as a result than a £30 bottle of champagne and some very nice chocolates, even though the latter may be cheaper overall.

Adopting the good quality present route almost always gave rise to thanks.

Peace was restored at Christmas.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone

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By cheeky
07th Dec 2010 13:48

bonuses

but how did you set targets for an accountancy firm?

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