Bonuses are starting to reappear at small companies as business shows signs of picking up.
Many companies had to eliminate employee bonuses last year as cash flow dwindled and banks began cutting or even shutting down credit lines. A yearend payout was also unthinkable at companies that were laying off staffers or slashing their costs so they wouldn’t have to let anyone go.
While there are still many firms struggling, some owners who had to forgo 2008 bonuses are reinstating them.
Denise Kanaar couldn’t pay bonuses to her employees last December because her freight management company’s cash flow dropped.
“This broke my heart because I am so blessed with a wonderful team who worked so very hard for the company,” said Kanaar, chief executive of D &D Logistics in Muskegon, Mich.
At this point in 2009, “we’re kind of staying on a flat line now, and it’s promising and I can see a little bit of light coming through and things are getting better,” Kanaar said. So, “I was able to give a little cash bonus, more of a gift” before Thanksgiving.
Each of her eight employees got $700, less than she’d given them in the past.
“That way they’d be able to buy some things for Christmas or whatever they wanted to do with it,” she said.
In any economic climate, owners who believe in paying bonuses are looking to foster goodwill with their staffers, and, if the money is based on performance, give them an incentive to keep working hard.
Sandy Hunter’s company, which provides industrial management consulting, did well in 2008 but has seen business level off this year. She’s giving bonuses to her three employees and some independent contractors, but the amounts are smaller than last year’s.
“Those (employees) that hang in, I feel they need to be rewarded,” she said.
Some owners who still can’t give bonuses are trying instead to give them gifts. Bonuses generally are considered to be based on performance, the company’s and the individual employee’s, and also a staffer’s tenure. Gifts tend to be given as a token of goodwill and loyalty and also tend to be smaller.
Bonuses are so important to some owners that they’re willing to sacrifice their own compensation to reward their workers.
“You need to demonstrate that you value your loyal employees, even if it means cutting your own salary back,” said Margaret Wilesmith, who owns Wilesmith Advertising/Design in West Palm Beach, Fla.
The advertising industry has had a rough year, but Wilesmith is giving her five employees bonuses.
“If we couldn’t do it, absolutely we wouldn’t,” Wilesmith said. “But I’m not going to use the condition of the economy as an excuse to deny them some reward for keeping the agency stable in the year that was difficult.”
Some companies have flourished through the recession as they found greater demand for their goods or services, and they’ll be giving bonuses as usual.
Adam Kluger’s New York-based public relations firm has picked up business as companies shied away from traditional advertising. Changes to his business model also brought in more revenue.
As a result, the seven employees at Adam Kluger Public Relations can look forward to getting bonuses this year, and a little something extra: Tickets to see pop star Lady Gaga in January.
Sure, a cash bonus is great. But getting employees in to see a hot show is a way to “reward the young folks with something they really want,” Kluger said.
Joyce Rosenberg writes about small business issues for the Associated Press.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
