End of Year Expectations

It is the climactic scene in the movie Christmas Vacation. The arrival of the long-awaited holiday bonus that has been discussed all movie; the expected check already spent with thoughts of how the entire family will enjoy its proceeds. In the scene, everyone gathers around Clark Griswold, their faces full of expectation and excitement. Clark excitedly tears open the envelope to find it’s not his expected big money check, but instead is a one-year membership to the Jelly of the Month Club.

Cousin Eddie exclaims, “That’s the gift that keeps on giving the whole year!”

“That it is, Edward.  That it is indeed.“

Whenever there is a strange year like 2024 where no one knows quite what to make of it, we think it is good to revisit what we call the “Jelly of the Month Club Lesson.”  It is a reminder of how important it is to manage expectations especialy when outcomes fall below projections and have an impact on “normal” end of year compensation rewards.  While 2024 is a mixed bag for companies with some having a strong year while others really struggled, it is also a good reminder that year-end bonuses are all about rewarding your employees if possible and meeting the assumptions that exist… despite a year that may have been economically challenging.

The main expectations that employees have from their workplaces? Honesty, transparency, and fairness.  The holy trinity of a good employer in the midst of uncertainty.

Honesty

People want to believe in good things and they want one of those good things to be their employer.  Honesty helps make that possible.  Employees have high expectations from their employers and will not continue to work for companies they do not trust. Companies need to be consistently forthright and truthful to employees, even for small details, to make it possible to believe the big messages that require more faith. Especially when it comes to tangible items like compensation and bonuses, employees need to believe the validity of why a company may not be able to give a bonus this year.

Transparency

This is a big one. And the reason it is so important is simply because people want to know what is going on. Where companies in the past could be more guarded with their information under the guise of protecting the employee, today’s workers expect information.  Our advice? Give it to them, even if it is a difficult message. If you are wondering where your company needs to demonstrate transparency, simply discover where your employees have uncertainty. While you may not be able to give the desired answer, the reality is that any answer is usually welcomed over the unknown. And the good news about having a transparency issue is that it is often easy to fix. Simply tell people the truth.

Fairness

Part of the reason there is an increased push for honesty and transparency is because the two combined result in employees’ feelings about fairness. When employees observe that compensation decisions are based on clear criteria and are equitable relative to their contributions and market standards, they are more likely to feel valued and treated fairly. Conversely, discrepancies in pay, favoritism, or a lack of transparency can lead to feelings of unfairness and dissatisfaction.

Another reality that falls under fairness and is part of the year-end process for most companies is giving merit increases to those employees that deserve it. Merit increases are important because they directly recognize and reward employees for their individual contributions, motivating them to maintain or improve their performance. Merit-based pay helps retain top talent by ensuring that high performers feel valued and are incentivized to stay with the company. If they do not feel they are being rewarded for their high performance, they will feel unfairly treated and possibly look elsewhere.

Which brings us back to the movie Christmas Vacation which sums up the expectations for honesty, transparency, and fairness when Clark complains about his lack of bonus to his boss:

“Thanks for telling us. I was expecting a check and instead I got enrolled in a jelly club. Seventeen years with the company – I’ve gotten a Christmas bonus every year but this one. You don’t want to give bonuses, fine. But, when people count on them…”

Tell your employees what they need to know. If it is rooted in fairness with a plan for the future in which they can believe, you have a good chance your employees will stick with you. Be the company they can count on, because that’s the gift that really keeps on giving the whole year.