How to select the right Christmas rewards for staff

As summer slowly fades into a distant memory, employers are turning their attention to Christmas, setting out plans for festive rewards and incentives for their staff.


If you read nothing else, read this …

  • First determine what kind of Christmas reward to give staff, such as an annual bonus, sales incentive, festive thank-you or seasonal gift.
  • Gift cards and vouchers are popular, while employers can also help staff with their work-life balance by providing more time off during the Christmas season.
  • Communication is also important, so the reward or incentive should be delivered with a careful touch.

But more than one-third (35%) of employees have never received a Christmas reward from their employer, according to research published by Edenred in September 2013.

Its Saying thank you at Christmas 2013 survey also found that only 30% of respondents received a Christmas reward in 2012, and 65% did not expect to receive a reward from their employer.

John Sylvester, director, incentive and motivation division at P&MM, says: “From a perception point of view, it’s a new year, it’s a full stop. Many organisations will take it as an opportunity for a staff-retention, employee-engagement type of activity, just to say, ‘thank you and here’s a little gift from us’.”

It may seem a bit early, but the immediate post-summer period is an ideal time for employers to start planning Christmas benefitss and incentives. The first step is to determine what type of seasonal joy an employer wants to bring to its staff. For instance, is it an end-of-year bonus, a sales incentive, a festive thank-you or a simple Christmas gift?

Phil Sproston, sales director at Sodexo Benefits and Rewards, says: “It is the difference between incentives and recognition. If an employer is incentivising people, it needs to be measurable. If it’s recognition, it doesn’t need that kind of specificity; it can just be saying ‘thank you’.”

P&MM’s Sylvester agrees. “The starting point is to be clear about what the employer is looking to achieve, whether it’s a thank-you for the year and a little bonus for Christmas, or whether it’s a specific performance-related or last-quarter incentive,” he says.

Tastes and aspirations

An employer should also consider what type of reward or incentive would suit the tastes and aspirations of its employees. A popular option is a gift card or voucher , which caters to a range of preferences and can often help staff to manage their costs during the festive season.

Sylvester says: “Retailers, such as Marks and Spencer or John Lewis, tend to be particularly popular in those types of situations. If the audience profile is looking to fund Christmas rather than having a treat, then supermarket vouchers go down well, because there is a lot of food and drink to be bought.”

Sproston adds: “The advantage of gift cards and vouchers, while they are ubiquitous, ensures everyone is able to effectively personalise their own reward.

“A gift voucher with a multitude of spending options says, ‘I value your contribution, I want to recognise your contribution as an employee, and I want to give you the freedom of choice to pick something that is personal, relevant and of value to you’.”

P&MM sees huge demand for gift cards during the holiday season, with about 25% of its annual volume going through in the final two months of the year. Sylvester adds: “That is a mixture of employers wanting to do that year-end thank-you for employees and also, as part of a performance-based or recognition programme , employees will often save it up during the year to spend at Christmas.”

Hampers out of fashion

Gifts, such as Christmas hampers, have gone out of fashion in recent years. “The reality is, to put the hamper together is of note and does cost a bit,” says Sylvester.

“As employers looked at their ethics and approach, there were questions as to whether it should include alcohol, the religious aspects to consider, whether it contains pork or not, and so on. It can become quite complex and then end up being a bit bland as a result.”

It is much more common for employers to host an annual Christmas party , whether this takes the form of an end-of-year event or a team afternoon out. Michael Rose, director of Rewards Consulting, says: “In the last few years, with the recession, a lot of organisations have been cutting back on those sorts of activities.

“I’m a great believer in finding the opportunity to celebrate things and get some common experience, and try to think about people as the whole person that comes to work, so socialising with colleagues can be very important. I would hope that, this year, employers would start to bring these events back or do a little bit more than they have in the past.”

Employers should also consider the timing of festive events, because some employers, such as those in retail, manufacturing or call centres, have specific resourcing requirements. Rose adds: “Employers have to make sure they have the business-as-usual activity going on, while at the same time not excluding anyone from celebrating appropriately.”

Work-life balance

If an employer cannot afford to pass out gift vouchers to all staff or host a Christmas party, perhaps it could consider helping employees manage their work-life balance during a very busy time of year. “More organisations are saying they will close a little bit longer over the Christmas holiday, and they really want people to have some time out to relax,” says Rose.

Festive rewards and incentives, whether literal or figurative, help to engage and motivate employees , showing that their employer values their hard work during the year. But there is also a chance that this strategy could backfire.

“If you send everyone a £5 gift card, that would do more harm than good,” says Sylvester. “But if it’s £25 or more, then generally it is taken in the spirit in which it’s intended. There is a balance between giving something that is appreciated and something that fits the budget.”

It is also worth mentioning that, because of today’s multicultural society, focusing too much on Christmas, rather than multi-religious celebrations, can alienate some employees.

Get the message right

Rose adds: “People are being a little more cautious to think more of the end-of-year celebration, trying to get the balance right.”

It is important for employers to give staff the right message when presenting a Christmas reward. “It’s important that it is delivered with a flourish and with the right message, especially if it is a thank-you for the year,” says Sylvester.

“It’s really important that it isn’t just distributed through the internal post system, that it carries the sentiment that it’s designed to carry, which may just be ‘thank you’ or it might be ‘well done’.

“Either way, the communication and the method of presentation or delivery are as important as the value.”

Employers can consider a range of options to reward or incentivise employees at Christmas. But rather than offering a token gift card, bonus or team party, they should make sure the reward suits their workforce and is delivered in a manner that fits the festive season.

Case study: Superdry


With nearly 3,000 employees and 123 stores around the UK, Superdry faces a difficult challenge in celebrating the Christmas season with its staff.

In December 2013, the retailer presented every employee with a £30 Restaurant Choice gift voucher to fund their team Christmas outing. The vouchers could be spent at more than 1,500 restaurants across the UK, including Café Rouge, Jamie’s Italian, Nando’s, PizzaExpress, The Handmade Burger Co and Yo! Sushi.

The previous year, Superdry provided PizzaExpress gift vouchers, which were handed out to store managers to organise events for their team.

Karen Kear, retail operations administrator at SuperGroup, says: “We took the decision to give everyone the opportunity to celebrate Christmas together at a restaurant of their choice. 

“The extensive restaurant network allowed staff to choose where they wanted to dine and nationwide coverage meant we could send vouchers out to all stores.”

Each store manager was give £30 worth of gift vouchers for each employee and the teams then decided where to hold their Christmas celebration.

The gift vouchers were handed out in a special presentation wallet with a personalised message.

“The initiative was really well received,” says Kear. “Staff appreciated the choice.”

Neil Conway: Seasonal reward needs careful thought


At individual, group and organisational levels, there are good reasons to intensify the use of year-round incentive schemes, such as performance-related pay , merit pay and bonuses, at Christmas, due to increased trade and therefore increased organisational need for labour supply.

Also, employees’ desire for money is heightened at Christmas and the opportunity cost of choosing to work at Christmas is higher, as it is done at the expense of time elsewhere.

The same rules apply when administering incentives. Performance-related pay is most effective where performance goals can be objectively and meaningfully measured, where there is a clear ‘line of sight’ between employee behaviour and the reward, and where employees have reasonable control over factors that affect performance outcomes.

The level of the reward crucially influences the focus on employees’ behaviour and so the organisation must consider whether it wishes to encourage individual, group or organisational performance. Most organisations hedge their bets and combine the use of individual, group and organisation-wide rewards.

Employers should also reflect on the kind of culture they want, perhaps particularly so at Christmas, where fixating on incentives may appear at odds with other popular culture interpretations of Christmas (a time for giving, importance of social relationships, and so on).

From this perspective, organisations should draw attention to the social impact of their employees’ work on customers or the public. Such pro-social impact can be a powerful intrinsic motivator and may be very compelling at Christmas.

Turning to gifts, by which I mean one-off tokens of appreciation where there is no expectation of return, there is some research that supports the desired effects of gifts at work. Small gifts in the short term boost an individual’s mood or morale and gifts may have a longer-term effect by making the recipient feel valued by their employer.

However, gifts may have unintended consequences. The employment relationship is fundamentally an exchange of labour for pay and there is, arguably, no room for gifts at work. Gifts in workplaces are likely to carry additional meanings that imply reciprocation by employees in some way.

Gifts may also raise equity issues, for example to employees who do not receive the gift and employees who view the gift as a derisory gesture compared to the effort they put in.

Interestingly, the logic of gifts is rather opposite to that of incentives: the gift must be discretionary with no expectation of return, unrelated to the organisation’s formal reward system and unrelated to employee past performance.

How the gift is framed and presented to employees is important. A poorly conceived gift presented in front of colleagues could be met with scorn and embarrassment.

A good suggestion would be an expenses-paid party or meal because this allows employees to have some control over the gift they receive, and therefore sidesteps possible issues of inequity and allows the gift to be customised to employee tastes.

Capitalism’s materialist desire to turn Christmas into a consumer frenzy is ever stronger and organisations will need more workers, and workers will need more money, so the case for incentives at Christmas is strong. Perhaps an overriding value should be to use rewards and gifts as symbols of a cohesive social relationship and hope employees buy it.

Neil Conway, professor of organisational behaviour and HR management, Royal Holloway, University of London