Our story begins with Homer taking his family out for an expensive dinner in honor of Bart's first "A" (which he got while forcing himself to drown out the noises of Mrs. Krabappel and Principal Skinner having sex in the empty classroom). However, when Homer's credit card is rejected and they have to entertain the customers to pay off their debt. Plus, Homer sold off pieces of the car for gas money (which he spent on a novelty horn). A visit to Lindey Naegal who bluntly tells them that because Homer is too stupid to manage his money, they're having severe money troubles (so severe that they'll need to file for bankruptcy several times over and, even if they did, they would still lose money long after they're dead and gone, and their graves with go untended and vandalized by an elderly Nelson Muntz). She tells them simply that the only solution is more money.

Meanwhile, Smithers is away in New Mexico acting in a ''Malibu Stacy'' play he wrote and Mr. Burns decides to spend his week looking for things to amuse himself. After Homer throws pudding at Lenny at Burns' request, he decides to make Homer his "Executive in Charge of Recreation" (or in his words, "prank monkey").

For several days, Burns pays Homer to play pranks on the locals (like eating a rare ''SpiderMan'' comic in front of Comic Book Guy) and humiliating himself (dressing up as a baby in the Springfield Stadium bathroom). The family is left wondering where Homer's getting these large sums of money.

At the Springfield Zoo, Burns has Homer dress up as a panda named "Sim-Sim", where he, in an infamous scene, is painfully shocked and accidentally attracts the affections of the zoo's male panda. When Homer attempts to escape, he gets caught in a barbed-wire fence and is sprayed upon by skunks. Lisa discovers him there, seeing that her father has sunk to a new low in the name of the almighty dollar.

Lisa tries to convince Homer to stop being Burns' "prank monkey" and put his dignity before money. Homer is convinced to use his money to donate to the needy and buys a bunch of toys at Costington's. Impressed with Homer's generosity, the store recruits Homer to play Santa Claus for Springfield's Thanksgiving parade. As Homer is parading down the streets throwing toys to children, Burns shows up in his own float tempting Homer with a million dollars to throw fish guts onto the crowd.

When it appears that "Santa" is throwing fish guts onto everyone, Lisa thinks that Homer has "sold his soul". However, it turns out Homer declined the offer and it's Burns himself pelting everyone. Homer thanks Lisa for helping him get his dignity back.

!!"Homer vs. Dignity" contains examples of:
* BadSanta: Burns tries to pay Homer to act as one in the parade, throwing fish guts onto the crowd. Homer refuses and Burns takes up the role himself.
* BaitAndSwitchComment: When Bart was telling how he got his "A", how many viewers thought he'd say he blackmailed Principal Skinner and Mrs. Krabappel?
* BlackComedyRape: The infamous "panda scene".
* ChristmasEpisode: Near the end of the episode.
* ComicallyMissingThePoint: When Lindsey Naegle shows Homer and Marge a simulation of the family becoming poor and wrecked. Homer remarks "Marge, your posture looks terrible".
** Bart doesn't realise his 'cheating' is actually genuinely studying.
* EvenEvilHasStandards: Burns pays Homer to throw pudding into Lenny's eyes despite Homer's protests that Lenny's a war hero. Both laugh at Lenny's misfortune and Burns takes more sadistic pleasure when Homer throws another pudding dessert into Lenny's other eye. But when Homer hits Carl in the eyes with pudding, Burns is appalled.
--> '''Mr. Burns''': What ''are'' you doing, man? That's Carl!
** RiddleForTheAges: Which standards was Burns upholding in this case?
** FridgeBrilliance: Probably race, since Carl is black and, for all of Burns' contempt for anyone who's not as rich as he is, viewers have never seen Mr. Burns be racist or sexist. This was probably the writer's way of saying, "Mr. Burns may be a twisted, loveless billionaire, but he prefers to make everyone regardless of race and/or gender feel bad instead of just single out one."
* EyeScream: Pudding and fish guts being thrown into Lenny's eyes
* {{For The Evulz}}/{{For The Lulz}}: Burns paying Homer to make a fool out of himself.
* KickTheDog: A whole episode-ful.
* {{Mondegreen}}: At the beginning, Homer mishears "financial planner" as "financial panther" and has an ImagineSpot of siccing a black leopard onto a creditor.
* NakedPeopleAreFunny: A RunningGag involves Homer being accidentally stripped to the nude and shocking a passing dowager into fainting
* NoodleIncident: When asked why he didn't help Homer in the infamous panda scene
--> '''Mr. Burns''': Too busy keeping my sides from splitting. [In a matter-of-fact tone] It's happened before.
* RecycledScript: We have the family in financial trouble, Lisa worrying over a Simpson male's soul ("Bart Sells His Soul") and Homer dressing up as Santa Claus ("Simpsons Roasting On An Open Fire").
* {{Retirony}}: The TropeNamer. Mentioned when Chief Wiggum tells his financial planner that he's not going to create a retirement fund since he's a police officer, and, according to many cop shows and police movies, an officer who's only X amount of days from retirement (and tells his partner about what he's gonna do when he retires -- usually, it'll be something like spending more time with his wife and kids) will always get murdered on the job. When the planner asks what he will do if he isn't shot, Sarah Wiggum burst into tears and Clancy is highly insulted.
* WhatCouldHaveBeen: Many people complain about how bad the episode is, but few know that [[UpToEleven it could have been worse]]: the original ending had Homer Simpson throwing ''pig's blood'' at the crowd while wailing, "Merry Christmas! God help me!" [[GainaxEnding Then, the scene flashes forward to the future, where an elderly Homer tells a group of future children that, because of him, Christmas is now celebrated with pig's blood being thrown at people.]]