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Year-End Employer Rewards to Employees Can Come in Small Packages

A poll shows that the majority of workers don't expect or need huge end-of-year gifts: For 69 percent, a gift card of $25 will do.

October 30, 2012
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Related Topics: Top Stories - Frontpage, Reward (Recognition) and Incentive Programs, Compensation
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Spreading some holiday cheer—and a little morale boost—might be easier than you think in today's strained economy, according to a recent survey from Texas-based Parago Inc., a benefits consulting company.

Parago's online survey of more than 600 workers found that 69 percent of employees still do not expect end-of-year gifts from their employers, but they're even more appreciative of small rewards than in 2011. Sixty-one percent of employees said just a $25 prepaid gift card would satisfy expectations, while 85 percent said they'd be happy with $100 or less.

Furthermore, 83 percent of employees said a reward would make them feel either appreciated, motivated to work harder or more loyal to the company, up from 81 percent in 2011. Survey results were released Aug. 27.

If employees don't seem to care about a gift, why should employers even bother with them?

"If they don't expect anything, then there's a great opportunity for surprise," says Theresa Wabler, director of marketing for Parago, based in Lewisville, Texas. "And one of the core tenets of the incentive industry is surprise and delight. Clearly, a little bit does go a long way."

At the same time, benefits experts recommend that employers put careful thought into how they reward their employees around the holidays, as good intentions can sometimes backfire. That's especially true for companies that have already stripped many perks, from small things such as free coffee to more substantial ones, like unpaid leave, health insurance and vacation pay.

"For organizations that have really done away with the takeaways ... to then come back and say, 'Happy Kwanza: Here's two free tickets to a movie,' there's just considerable risk of a backlash," says David Van De Voort, a principal in the compensation practice in the Chicago office of the HR consultancy Buck Consultants. "People will just say, 'What's the real story here?'"

In fact, many benefits consultants say holiday gifts, when delivered outside of an overall pay-for-performance strategy, are as old-fashioned as a holiday fruitcake.

"From a purely professional compensation-consultant perspective, I've always been leery of the Christmas bonus which suggests that it's just a gift from the company, as opposed to something that's a true reward for performance," says Van De Voort. "There's just a very strong movement toward wanting all kind of incentives to be rewards for performance, especially in the last few years when money has been so tight."

Razor Suleman, founder and chairman of Achievers Corp., a San Francisco-based employee rewards and recognition consultancy, says small parties can be fine, but they shouldn't be the cornerstone of your employee rewards efforts. He advises clients to establish a goal-setting and performance-driven culture in which the year-end event is really an opportunity to recognize and reward the highest achievers with bonuses and gifts.

"There's no way the business succeeds without employees succeeding first, and it's important to recognize that," Suleman says.

Many companies cut back on lavish holiday parties during the recession, but some benefits experts say the events are starting to come back. Still, the events tend to be much more modest affairs, says Catherine Hartmann, a principal at benefits consulting firm Mercer.

Hartmann advises employers to survey employees about what they would appreciate around the holidays. Firms that hire many younger workers, for example, might find holiday parties are more popular, while employees with families would rather have flex time and time off around the holidays.

"I'm all about trying to fit with the culture of the client and really asking employees what they value," Hartmann says. "You just have to be much more thoughtful about what you're spending on things like that."

Meg McSherry Breslin is a writer based in the Chicago area. Comment below or email editors@workforce.com.

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