Many Businesses Throw Christmas Parties; Fewer Hand Out Bonuses

Some companies have begun awarding Christmas bonuses to their employees based on perseverance.

At Cognex, a Massachusetts high-tech firm, workers with 10 years tenure received a week’s vacation in Europe last Christmas. All expenses paid. This year, the top prizes under the corporate tree are a visit to the pyramids in Egypt.

In Seattle, Microsoft is puzzling over what to give employees who have become so rich working for the firm that they don’t really need to work. “The question is,” says Tom Agnew, a Spokane management consultant whose brother is helping to redesign Microsoft benefits and compensation package, “what can you give employees who already have everything that won’t actually be a work disincentive?” Certainly, not more money.

In Spokane, however, where money still matters, many companies reportedly are steering away from handing out Christmas bonuses en masse.

Instead they prefer to tie bonuses to individual and company performance, says Angi Shamblin, benefits and compensation consultant with McFarland & Alton, the big local accounting and consulting firm.

Gift certificates for a few bucks also appear to be passe, says the consultant. They are recognized by employees as largely a “gratitious” reflex. “If you have a thousand employees and you dish out $25 apiece,” says Shamlin, “that may mean little if anything to the individual employee, but for the company it adds up to a considerable expense.”

This is money the company could put into bigger and better bonuses tied to performance, and get greater appreciation and return for the buck, she says.

Christmas parties, on the other hand, continue in vogue nationally and locally, even among the wealthiest and most avant garde firms.

“Most employers in Spokane,” says Shamblin, “will host a Christmas party, usually a big dinner event, as a way of celebrating the season and saying thanks to employees for their efforts this year.”

Retailers hope to spend less, sell more

Spokane merchants apparently are hoping to eat their fruit cake this Christmas and have it, too.

A survey by the Washington Retail Association indicates that Spokane retailers overall expected to spend less on inventory this holiday season than last Christmas but to sell more goods. How is this possible?

The survey didn’t ask, association spokesperson Pam Eaton informs me. But compared to Western Washington retailers polled, Eastern Washington merchants were markedly more confident of their ability to hold the line on purchases of inventory, while predicting higher sales. This ought to do wonders for the bottom line.

On both sides of the state, association members, who range in size from giant department stores to small independents, expect sales will be up well, Eaton said. “Last Christmas,” she said, “Spokane’s expectations did not come up to the level of the rest of the state.”

The association’s second annual holiday shopping survey also found that seven out of 10 retail members were hiring part-time workers this season, up from just over half at this time a year ago.

Another surprise in the survey, said Eaton, was that “almost nobody said they expected trouble hiring extra help for the holidays.

“Long before the survey, even many of our own members were anxious that they wouldn’t be able to get part-time workers this Christmas,” Eaton said. “But the shortage doesn’t appear to be developing.

“A lot of people are saying though, that the quality isn’t there,” Eaton added. “They can get the bodies, but the skills and the commitment to work aren’t there.”

Finally, the survey provides rare solid data on just how important the holiday season is to retailers. For years, store owners, the media and industry officials, from Main Street to Wall Street and Washington, D.C., have generalized about merchants’ annual sales volume between Thanksgiving and Christmas. Typically the figure bandied about is one-third. Rarely if ever less. Often more.

But in this survey, when retailers were asked how much of their annual sales they expected to ring up during the holiday season, their answers averaged 24 percent.

Corporate Santas see benefits

Corporations can play Santa and earn a hefty federal income tax deduction by donating slow-selling inventory to charity.

“We receive and redistribute donations to thousands of schools and charities across the country, including two in Spokane,” says Jack Zavada, spokesman for the National Association for the Exchange of Industrial Resources. The nonprofit Illinois-based exchange offers free counseling and instructions on the process.

In Eastern Washington, North Idaho and Western Montana, the exchange serves 53 schools and charities, Zavada told me. Included are the Community Colleges of Spokane Foundation and the Spokane branch of the Salvation Army.

“Many companies currently liquidating products,” says Zavada, “could be money ahead donating them and taking a tax deduction instead.” Phone 1-800-562-0955.

, DataTimes MEMO: Associate Editor Frank Bartel writes a notes column each Wednesday. If you have business items of regional interest for future columns, call 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review