---
title: "How Should Distributors Cleverly Distribute Year-End Bonuses?"
description: "A case study of a distributor named Lao Zhang who fears employee turnover after giving year-end bonuses, despite paying competitive amounts. The article analyzes why his approach fails and offers practical tips on secrecy, splitting bonuses, considering tenure, combining material and non-material rewards, and choosing the right time and place for distribution."
author: "崔自三"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-11-24"
language: "en"
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# How Should Distributors Cleverly Distribute Year-End Bonuses?

> A case study of a distributor named Lao Zhang who fears employee turnover after giving year-end bonuses, despite paying competitive amounts. The article analyzes why his approach fails and offers practical tips on secrecy, splitting bonuses, considering tenure, combining material and non-material rewards, and choosing the right time and place for distribution.

**Tip: Click the blue text above, “FMCG Distributor Professional Consulting,” to learn more about marketing and distributor internal management.**

**Case:** A certain FMCG distributor, Lao Zhang, feels anxious every year when distributing year-end bonuses. It's not that he's reluctant to give bonuses—after all, after nearly 20 years in business, he earns a lot of money each year. He has quite a few employees: with office staff, warehouse keepers, drivers, and salespeople, there are over 30 people. The total annual bonus amount is around 100,000 yuan. Yet, every year after the bonuses are distributed, he feels a genuine fear. Why? Because every year after handing out bonuses, some employees resign and jump ship, including a few key staff members. He is puzzled: if he gives too little, his peers give similar amounts, so what's the problem? Is his method of distributing bonuses wrong? He distributes based on position and contribution, and the bonus criteria are known to everyone. So where is he going wrong?

**Analysis:** In the case, Lao Zhang's intention is good: everyone has worked hard for a year, and as the boss, giving bonuses is a reward or recognition for the year's work. But why doesn't the bonus achieve the desired effect? In summary, it's because Lao Zhang lacks skill in distributing bonuses. So, how should distributors distribute year-end bonuses?

**Bonus distribution should be confidential.** "Water that is too clear has no fish; distance creates beauty and attraction." As a distributor enterprise, to maintain employees' curiosity and cohesion, and to encourage them to stay loyal, the distributor should note: First, the salary system should be relatively confidential. While salary standards are relatively open, there should also be a degree of confidentiality—for example, stipulating that employees should not casually inquire about others' salaries or ask about salary standards unrelated to them. Because the distributor boss will adjust employee wages based on individual ability within the overall salary framework, keeping the salary system confidential is beneficial for retaining and utilizing talent. Second, bonus amounts should also be confidential. This mainly refers to the amount, which should be strictly confidential. Everyone can know that year-end bonuses are given, but the specific amount should not be casually asked. Why do foreign enterprises rarely have problems with bonus distribution? Because they have explicit rules that employees must not inquire about others' salaries or benefits. People are not concerned about scarcity but about unfairness. Following the principle of confidentiality in bonus distribution will save the enterprise a lot of trouble. Moreover, it guides everyone to focus on their own work; if you contribute, you will be rewarded.

**Learn to split the bonus.** There was an enterprise that introduced a system of "one person works, the whole family gets paid." How did it work? It's simple: the enterprise divided the salary into three parts—80% went to the employee, 10% to the employee's wife, and 10% to the employee's parents (all directly deposited into their accounts). As a result, this enterprise achieved a record of no employee turnover for three years. This enterprise paid great attention to the skill of salary distribution. "Stones from other hills can polish jade." Distributors can also split bonuses, giving not only to the employee but also to their family members. This not only blurs the amount but also "attacks the heart"—whose heart? The hearts of the employee's spouse, children, parents, etc. In this way, the distributor spends little but achieves significant results. Therefore, it is also important to expand the scope of bonus distribution. By expanding the scope, the distributor expands the united front, making employees' families stand on the enterprise's side, and it also enhances word-of-mouth, further consolidating employees' confidence and loyalty.

**Year-end bonuses should consider employee tenure.** Why do some old employees choose to leave after receiving bonuses? Sometimes it's not that they are unfeeling, but that the distributor has not paid attention to details. For example, if all employees—whether they have worked for three years, five years, or just joined—receive the same year-end bonus, it is hard for old employees to be convinced. Therefore, when designing the bonus, the tenure-based portion should be separated and clearly communicated to old employees that this is a reward only they enjoy. This enhances their pride, sense of belonging, and self-esteem, and encourages them to continue working hard to repay the enterprise's kindness and care, making them understand the favor of recognition.

**Year-end bonuses are not just cash; they also include material and spiritual rewards.** Many distributor friends immediately think of cash when they hear "year-end bonus." In fact, year-end bonuses include not only cash but also prizes, welfare items, and even certificates of honor—both material and non-material. Combining all three is most effective. Cash is an affirmation and recognition of the year's work performance and is the primary incentive. Items, such as welfare goods—flour, oil, fish, fruit, snacks, small appliances—can stimulate employees' sense of honor and satisfy their vanity. Chinese people care most about face and comparison; these items give them a basis for comparison. Certificates of honor, awards, and good news reports, along with wearing red flowers, satisfy employees' inner spiritual needs, motivating them to better innovate and contribute more to the enterprise.

**Pay attention to the time and place of distribution.** Some distributor bosses do not pay attention to the method when distributing bonuses. For example, they distribute red envelopes collectively in front of everyone, or they give them together with salary. These are inappropriate. Distributing red envelopes at a specific time and place has the following drawbacks: it makes everyone feel that the year-end bonus is universal, like eating from the same big pot, so there is no sense of exclusive superiority. It also makes outstanding employees who contributed more feel dissatisfied—if contributions differ, how can rewards be the same? Secondly, collective distribution gives everyone a chance to compare and discuss, which can easily trigger negative debates or even group incidents (for example, some employees might think the boss is unfair and collude to resign collectively), making the distributor's efforts counterproductive. Therefore, the distributor boss should carefully consider when and where to distribute year-end bonuses. It is best to distribute them separately, even at different times and places, adapting to the time, place, and individual. Only then can it be more targeted and have a more prominent effect.

In summary, how distributors distribute year-end bonuses is an art. The boss should carefully consider employees' psychology, practice empathy, and pay attention to the time, place, and method of distribution, combining principle with flexibility. Only then will the bonus be "used on the blade," yielding tenfold returns for every unit of investment, stimulating employees' enthusiasm and initiative, encouraging them to work better and achieve greater results, and bringing more profit to the distributor.

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