During the holiday season, many design firms like to give bonuses to their employees to show their appreciation for their hard work throughout the past year. What many don’t know, is that there are many types of bonuses that could be utilized.

The 4 most common types of bonuses are:

• Blanket
  Every employee of the company receives the same bonus amount regardless of title, experience, or performance.
  Positive: Everyone is treated fairly.
  Negative: Can often come off as too generic.
• Tiered
  Employees are given bonus amounts based on their time with the company. An employee who has been with the company under 1 year would receive a lower bonus than an employee who has been there for 5 years.
  Positive: Could, hypothetically, decrease employee turn-over because they see there is something to work for.
  Negative: It can make younger employees feel slighted and bitter.
• Performance based on company revenues
  Employees are given a bonus that is a specific calculated percentage of the year’s total earnings. This method places the size of the bonus in the employees hands.
  Positive: Promotes good performance across the entire company.
  Negative: If earnings are not directly related to the efforts of the employees then they could feel that they are being gipped.
• Performance based on personal achievements
  Employees are given a bonus based on their personal achievements over the past year. This method places the size of the bonus on the individual employee. To be truly successful, these achievements should be set as goals at the beginning of the year so the employee can work towards them throughout the year.
  Positive: Great reinforcement to a job well done.
  Negative: Some employees could feel slighted if they aren’t able to achieve their goals because of reasons outside of their control (maternity leave, sickness, etc..).

So there you go, a quick list of the various bonuses you can use to show appreciation to your employees. Remember that if you choose to give a holiday bonus this year, make sure you consult with your accountant first to fully comply with all state and federal regulations. Happy Holidays!