- The Washington Times - Monday, December 17, 2001

Fewer employers are giving holiday bonuses to their workers as businesses throughout the country face turbulent economic times, a new study shows.
About 69 percent of companies will not offer holiday bonuses this year, up from 64 percent a year ago, according to the study conducted by Hewitt Associates, a global management consulting and outsourcing firm.
At Rockville law firm Garza, Regan & Associates, holiday bonuses are still awarded, but the amounts have diminished.
"Our bonuses this year will be about half of what we normally give out," says firm partner John Garza, who is a bankruptcy lawyer. "We expect 2002 to be much better and project a 'return to normal.'"
The firm also downgraded its holiday party, and instead of renting a restaurant it is holding its holiday celebration at Mr. Garza's home.
Businesses began shedding holiday bonuses in the 1980s, but the trend has rapidly picked up in the past two years, says Ken Abosch, senior consultant for Hewitt.
"What's happening is that companies are looking at what they are spending in end of the year holiday programs and are feeling they could put that money to better use," says Mr. Abosch.
The Hewitt study, a survey of 421 companies, found that 58 percent have never had a holiday bonus program and 10 percent had a program, which was discontinued. Of the companies that canceled their programs, 13 percent did so in the 1980s, 50 percent did so in the 1990s, and 34 percent have canceled them in the past two years.
"Holiday bonuses are not going to be very good this year," says John Challenger, executive vice president of the national recruiting firm Challenger, Gray & Christmas. "Certainly they will be significantly lower this year, especially at the executive level, because so much executive pay today is based on the performance of the company, of the stock price, and all of those indicators are way down."
Unemployment jumped to 5.7 percent nationally in November up from 4 percent a year ago. Layoffs through November were at nearly 1.8 billion, whereas in 2000 only about a third of that 612,960 jobs were cut.
Among companies that still plan on giving their workers a little extra cash for the end of the year, the gift amounts are shrinking.
Watson Wyatt, the international compensation and management firm, notes in a report released Nov. 20 that nearly 50 percent of 110 employers from various industries will slash annual bonuses for employees at all levels.
"Many are making major adjustments based on the state of the economy following the events of September 11," the report says. "They report plans to decrease merit budgets and incentive payouts as well as overhaul stock options."
The law firm of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, awards monetary gifts at the end of its fiscal year, in March.
Washington Gas, the local gas utility, also awards performance-based bonuses. It switched to the practice in recent years, after a long tradition of giving holiday bonuses, according to a company spokesman.

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