Being Friends With Your Boss May Cost You A Holiday Bonus

During this season of corporate gift giving, the luckiest among us receive a holiday bonus. This bonus is not only a monetary amount; it’s also seen as a symbol of where recipients stand in the company and how their contributions are valued.

But whether you get a holiday bonus may not be a matter of what you accomplished this year at work  but who you befriended. Being the boss’ friend can actually cost you a bonus, one study found.

Across a series of eight experiments published in the Journal of Experimental Social Psychology , researchers found that when under pressure to avoid appearing biased, bosses declined to award bonuses to their deserving friends in the office, granting them to nonfriends instead. 

Bosses care about public perception when it comes to office friendships 

When participants playing the boss in the study knew their choices for a bonus would be made public, they were often reluctant to pick a top-performing friend for the honor.

In one of the experiments, participants were told to decide how to assign a bonus for Mark and Dan, two employees with the same salary and job. Both Mark and Dan earned positive staff evaluations, but Mark’s were slightly better. When bosses decided who got a $100 bonus, two pieces of information made a difference: whether Mark was a known friend at work and whether the bonus would be kept private. In situations in which all employees in the company would know who was awarded the bonus and were aware of the boss’ friendship with Mark, the bosses were less likely to give Mark the bonus.

“They are so worried about appearing unfair to other employees, they might actually be biased and disfavor their friends,” said Shoham Choshen-Hillel, a senior lecturer at the Hebrew University of Jerusalem who co-authored the study with Alex Shaw and Eugene M. Caruso of the University of Chicago.

In this instance, the appearance of fairness may have mattered more to participants than actual fairness. It means bosses may care more about loyalty to themselves than loyalty to their friends. 

But when the bonus was kept private in the experiments, participants had fewer qualms over appearing to play favorites: Mark got the bonus 89 percent of the time. 

To avoid picking between personal alliances and professional fairness, bosses are even willing to turn to the comfort of a coin flip over having to make a decision. In a similar experiment pitting two employees against each other for a bonus, people in the boss role chose to flip a coin to decide a bonus. 

This bias against friends held true even when the bonus was not money but tickets to see the popular Broadway musical “Hamilton.” In a scenario similar to the Mark-Dan experiment, participants had to pick between two employees, one of whom was a friend and was known for being slightly more productive. If the extra ticket was an office expense, bosses picked their more productive friend only 28 percent of the time. 

To avoid bias, bonus awards should be a transparent process

To combat this unfairness, managers should be public and transparent about how bonuses are decided and distributed, Choshen-Hillel recommended.

“This way, everybody knows that you were fair,” she said. “People like equity. They like people who contribute more to get more and people who do less to get less, and that is actually what we perceive as fair.”

When the criteria for what qualifies as bonus-meriting success are written for all to see, it is easier for employees to understand the outcome, even when they do not like it. 

If you’re an employee, this bonus-deciding power may not be up to you, unfortunately. The onus is usually on managers with decision-making power to make the process fair and transparent, even when it makes them unpopular with employees.

Randy Conley, a vice president of client services and trust practice leader at the Ken Blanchard Companies, faced this dilemma when his company offered a bonus in the form of a trip to a nice resort. He was told that his project managers would be eligible to win the bonus by being paired with a sales representative; whichever sales rep performed best would win the trip for him- or herself and the project manager. But being part of the winning team was luck. Conley said the project managers had no choice which salesperson they were paired with and no control over the revenue that salespeople generated. His team declined to participate. 

“I took the heat of being the Scrooge that wouldn’t let our team participate,” he said. “But I couldn’t in good conscience dole out rewards to people when it wasn’t something clearly achievable by anyone on the team and there was no objective criteria upon which to base the reward.”

When you are the boss, it can be uncomfortable to tell your employees why they did not get a bonus someone else received. But what’s worse is making them have to guess.

“If you don’t have clear criteria for who/what deserves a holiday bonus, then it’s practically impossible to not be biased,” Conley said.