Friend’s,

I’m coming at you this week from the beautiful Kangaroo Valley, where I will be celebrating a friends wedding before heading back and wrapping things up for the year.

I’m going to be that person. It’s only 11 sleeps until Christmas (depending on where in the world you receive this).

And in case the proximity of the big day was lost on you, welcome to the Christmas edition of the FNDN Series.

I’m taking a different approach with this edition. Not only does the newsletter look beautifully Christmas, but I’ve invited some friends along to share in the festivities.

What are your plans for Christmas day (whether you celebrate or not)?

I’ll be enjoying the beach with family before heading to see even more family (and then promptly returning to the beach).

Enjoy this week’s edition ✌️

Matt 🎅

Know a startup Head of People looking for answers 🙋 why not forward this to them and make Santa’s job a li’l easier? 🎅

On the 1st of December 1989, a man from Illinois named Clark Griswold put down a $7,500 deposit to buy his family a swimming pool. All while assuming his upcoming Christmas bonus would cover the rest.

What follows is a comedic story of misplaced confidence, in one of my favourite Christmas movies to enjoy at this time of the year.

(I would add a spoiler alert, but this movie is as old as me, so if you haven’t seen it, sorry not sorry.)

Clark spends the film in pursuit of the perfect, old-fashioned Christmas, all while clinging to the belief that a seasonal cash windfall is not only guaranteed, but deserved.

When the envelope finally arrives, it contains a ‘Jelly of the Month Club’ subscription — a reminder that relying on discretionary rewards is a risky financial strategy, especially when the decision sits behind opaque executive logic.

(But don’t worry, things work out for Clark and he gets his bonus — saving Christmas. Of course the lesson is that the true meaning of Christmas is being with loved ones, in spite of bonuses or other imperfections.)

It’s funny on screen. It’s chaos inside an organisation.

Because Clark isn’t fictional in most workplaces.

He’s every employee who has quietly built an expectation around a “traditional” Christmas bonus. Even when the business never actually promised one. A practice rooted in 19th-century paternalism still shapes how people budget in 2025.

And that’s the tension this edition of the FNDN Series explores.

I’ve asked a group of People and Compensation operators to weigh in on the Christmas bonus:

I hope you enjoy.

Jessica Zwaan is the COO at Talentful and the author of Built for People, where she redefines employee experience through product thinking. Her next book, Purpose and Work, goes deeper into how purpose drives motivation, productivity and business performance. Pre orders are now open on: Amazon, Barnes & Noble, Kogan Page or Bookshop.

James A Seechurn is an independent rewards advisor, with two decades of experience shaping fair, scalable pay practices across global growth companies. He’s also the author of What Pay Costs, which explores how to design pay that motivates through trust, clarity and purpose — rather than control.

Arif Ender is Director, Compensation (EMEA & LATAM) at Palo Alto Networks and a senior Total Rewards leader with 15+ years’ experience in global companies such as Meta and Mars. He’s recognised for driving strategic global excellence in compensation, benefits and HR transformation, and is a faculty member of World at Work.

Giac Solimon is the Senior Compensation Lead at Monzo, and previously lead compensation practices for high growth organisations such as Snap and TikTok. Giac has a background in reward consultancy and publishes a regular newsletter on CompTech. Giac is taking on freelance reward projects in 2026, so hit him up if you need support.

Mark Frein is a fractional People executive and President of Melete Group, with past CPO roles at Oyster, InVision, Return Path and Lambda School. Mark has a PhD in Education, and blends academic rigour with deep experience scaling people functions, organisational design and culture across high-growth companies.

Jessica Zwaan: Call me a Scrooge, but Christmas bonuses feel increasingly outdated in modern organisations. They come from an era when reward was paternalistic and seasonal rather than structured and fair. Today people want transparency, predictability, and compensation frameworks that align to actual value creation, not one-off gestures tied to a (Western, religious!) holiday.

If you want to support people, do it through clear bonus schemes or functional stipends.

The traditional Christmas bonus is mostly a legacy ritual, not a meaningful or equitable part of a contemporary rewards strategy.

Arif Ender: I agree with Jessie’s comments however it’s always good to set the rationale beforehand. What do you want to achieve with such a bonus? If it’s a gesture, and it’s to make this time of the year a positive break, tell that! Instead of following outdated titles and practices, it’s better to “rebrand” it and provide it in a more inclusive way is the right thing to do.

James A Seechurn: A useful way to approach the question is to reset the purpose of pay. Pay operates, for the most part, as a hygiene factor. It prevents dissatisfaction, stabilises the environment, and allows people to manage their lives. The Christmas bonus tradition emerged from this logic. It was aimed at lower-income workforces, timed for a period of higher household costs, and functioned as a seasonal financial adjustment rather than a performance tool.

Maintaining a Christmas bonus also sends a cultural signal, which is why the first question is whether it aligns with your Employee Value Proposition. A company that emphasises stability and long-term belonging may find the gesture consistent with its identity. A company built on variable, performance-driven rewards may not. Either way, the gesture becomes part of the organisation’s values in practice.

Expectation-setting only becomes a problem when the bonus is used as an indirect incentive. Research by Cerasoli, Nicklin, and Ford shows that rewards do not undermine intrinsic motivation when they are not perceived as controlling. A predictable, non-contingent Christmas payment behaves like base pay. It becomes part of the financial rhythm of the year and a form of value transfer that reflects how the organisation understands its obligations to employees.

The risk appears when a Christmas bonus tries to be both incentive and cultural symbol, because that ambiguity creates disappointment over time. Clear intent avoids this. If the goal is a cultural gesture and a financial boost, frame it that way. If the goal is motivation, a seasonal payment won’t achieve it.

Mark Frein: The concept of compensation tied to a religious holiday is something worth scrapping, in my view. However, the idea of something near the close of the fiscal year in which everyone shares in positive outcomes for an organization is very much worth considering.

The simplest implementation I’ve personally handled is for the consulting firm I led over most of the 20-teens. At the close of the year, we gathered together for a year-ending employee party, and the firm partners announced what was, in effect, a profit share, based on our net earnings. It was straightforward math – everyone got the same percent of their salary. We set the percent based on our profit level. We had good years and not-so-great years and it was never something the staff counted on. But always appreciated!

I like what these kinds of bonus programs do culturally, especially when the determination of payout is absolutely clear both from the way the amount is determined and also why the payouts are made or not made. While not as easy to implement for most startups or companies that are in the negative on “burn” and EBITDA, the concept can be preserved by tying any annual bonus clearly to company-level targets.

Arif Ender: This needs to be fair, equitable and inclusive.

At the end of the day, the pay equity and pay transparency regulations’ main aim is to keep things equitable, fair and transparent hence providing any bonus that meets these criteria then it should be OK.

In my experience, DEI still plays a critical role, and in that sense if you have a diverse group of employees, technically Christmas is a religious holiday but a different variation in each culture/religion is already celebrated. Having it branded as a “Festive Season” rather than Xmas would be also perceived positively.

Giac Soliman: Since everyone else seems to have walked past this question, I'll step into the minefield.

I learned this principle studying economics, tested it on myself as a young retail investor, and then watched it play out during reorgs as a reward adviser. Losses hurt about twice as much as equivalent gains feel good.

Give someone a Christmas bonus even once and it stops being a nice surprise. It becomes part of their package in their head. That's the endowment effect at work. Taking it away isn't returning to neutral, it's inflicting a loss. Next, motivation (and your company's Glassdoor rating) tanks, trust evaporates and your best people leave.

If you're set on doing this anyway, you've got several options that are all varying degrees of difficult:

But step back for a moment. If the cost is manageable and people value it, you might be solving the wrong problem. Sometimes it's cheaper to keep paying it than to deal with the consequences of stopping.

A massive thank you to our contributors. Make sure to check them out on LinkedIn and enjoy their respective newsletters/books/content.

– Matt

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