Next year should you do a year-end function or just pay bonuses?

As the dust settles on this year’s work festivities, what lessons were learnt?

Many businesses in South Africa are still trying to financially recover from the different macroeconomics that have negatively impacted them.

Some of these companies would previously throw over-the-top year-end functions at luxurious locations, with an open bar for staff.

Others would show their appreciation through a 13^th cheque or bonus so their employees can enjoy the holidays and come back the following year refreshed and able to deliver higher performance than the prior year.

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Difference between a 13^th Cheque and a bonus

Malesela Letwaba, employment law expert at Cliffe Dekker Hoffmeyer said there is a difference between a 13^th Cheque and a bonus.

A 13^th cheque is usually equivalent to an employee’s monthly Cost-to-Company (CTC) and is included in the contractual agreement between the employee and employer.

The value of a bonus is influenced by different factors, such as the employee’s performance, the team’s performance, or how well the business did during the fiscal year.

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Whether a bonus will be paid out or not

He spoke on Kaya FM when he said when giving out bonuses, employers need to explain why a certain percentage of the bonus is being paid out, or not being paid out at all.

Letwaba made the example that the employer can explain that they are happy with the employees’ performance but the company did not make enough money to give a certain amount of bonuses.

Building up team spirit

Linda Trim, Director at Giant Leap said at company parties, mistletoe could be an HR violation waiting to happen or it could be a triumphant bonding event that people talk about for years. 

She said there are different types of pros and cons for year-end functions or corporate Christmas parties.

The pros include building up team spirit.

“There is nothing like watching your usually buttoned-up CEO doing the Macarena to bond the team. It’s like a group therapy session but with more drinks.” 

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One other aspect that employees may love is the gift exchange, which Trim sees as a perfect opportunity to offload that novelty tie or the singing fish plaque one got last year.

Employees can also be able to enjoy free food.

“Let’s be honest, for some, this is the main event. Christmas parties are to office workers what bread was to the French Revolution: a staple of survival.”

HR violation waiting to happen

Trim added that the cons of the office parties include awkward moments.

“There is always that one person who thinks the karaoke machine is their personal confessional, sharing way too much about their holiday plans or their opinion on the office coffee machine.”

Then comes the aftermath, having to spend the next day regretting the decision to challenge the intern to a limbo contest under the mistletoe.

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“Budget blowouts, someone always suggests renting out a champagne bar, only to realise the budget was more suited for a quiet dinner at the local well-priced pizza restaurant.

“Navigating the party’s theme can be like walking through a minefield wearing clown shoes. Is ‘Year End Celebration’ too cold, or does ‘Festive Gathering’ imply mandatory cheer?”

So, should a company host a Christmas party? 

Trim added that on the one hand, it is a chance to let loose, where employees might show a glimpse of their inner-self.

On the other, it is a potential disaster wrapped in tinsel, where the office gossip mill turns into the office gossip factory, running at full capacity.

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