It's that time of year again, the time for giving and receiving gifts, but also the time for giving and receiving holiday bonuses. The giving of bonuses should have a process laid out around it, especially if this is the first time you are doing it as it can be a confusing decision. Here are three things to bear in mind as you go about the process.

1. A bonus is a way of showing your appreciation and recognition of employees for their work over the past year, so the bonus must reflect how much each worker has contributed to the company. Generally, employees tend to view bonuses as an entitlement they should receive every year, regardless of how much they contributed to the company. But if the bonus is "customized", if I can use that term, then this will motivate the worker.

2. Consider giving higher bonuses to your top 5-10 percent highest performers, and no bonuses to the lowest 5-10 percent performers. If possible, the bonus should be accompanied with a meeting to discuss the employee's performance. Let the worker know how you arrived at the amount of the bonus, or why he did not get a bonus at all. This open discussion will prevent any feelings of unfairness on the part of the worker.

3. Consider non-monetary bonuses. This is also an effective reward for workers and is an intangible recognition. Examples of non-monetary bonuses are plaques, or even personal notes from the organization's head letting them know how valued and appreciated they are.

Let's hear your thoughts. How do you handle year-end bonuses? If you give non-monetary bonuses, what do you offer?