Fifty-five percent of respondents say they eliminated their holiday bonus programs because of cost, and 50 percent say they did so because of "entitlement issues," meaning employees had come to regard them as part of their compensation. Many of these companies, instead, are adopting performance-based incentives. Seventy-eight percent of employers offer performance-based bonus programs, up from 51 percent in 1991, according to Hewitt.
This does not mean that companies are feeling less charitable this year. Nine percent of employers surveyed say that because of events like the December 2004 tsunami, the Gulf Coast hurricanes and the Pakistan earthquake, they are directing all or part of the monies usually reserved for employee bonuses to charity.
Of those companies that will continue with holiday bonuses, 44 percent say they will give a food gift, 37 percent will provide retailer gift certificates and 12 percent will award cash. The majority of these employers are keeping holiday bonuses because they see it as a good way to show their appreciation for employees.