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Do Christmas bonuses work? By Sarah Fletcher


We all love a present once in a while (hint hint), but should your employer play santa and hand out Christmas gifts for good behaviour? HR Zone members discuss whether a festive bonus really motivates employees. By Sarah Fletcher

  • It can’t mask company problems
    Steve Watson, consultant:
    “Even the term ‘christmas’ may be offensive to some. However, ‘Winterval’ proved to be no help. As a gesture of goodwill they are fine, provided the other things in the organisation are ok. An unhappy organisation will not solve its problems through a festival bonus. And if it’s a gesture rather than real value it may even add to the cynical pyre.”

  • A few pounds mean very little

    Mike Morrison, consultant:
    “Christmas bonuses can be motivational; however, what happens when staff learn to rely on them and the business cannot afford it one year? Do they keep staff happy – generally speaking NO! In the city finance sector where these bonuses can reach five plus figures they are great but just a few pounds is a gesture that adds little impact. I am convinced people would prefer an extra day of leave to do Christmas shopping than a few quid!”
  • Outdated and pointless
    Richard Ciechan, director, In My Prime Ltd:
    “Christmas bonuses are probably “past their sell-by date” in today’s world. To be of any significance, whether in cash or kind, they are likely to attract tax and, therefore, they will fall into normal considerations regarding payments.

    What is the purpose of them? They are not linked to performance, they are unlikely to be linked to loyalty (and, if so, will be divisive) and in today’s multicultural environment they are unlikely to have and should not have overt religious significance. Furthermore, they smack of an outdated and rather insulting paternalistic view of the relationship with employees.”

  • Bonus won’t satisfy staff
    Rosemarie Loft, HR director, SMBC:
    “I’ve heard more moans about them than positives. Either they are cash and people think that it’s not enough; or it’s a gift and people think it’s useless. I worked for an American company once that used to give their employees a religious text for Christmas – wonder how that would go down generally?”
  • How do you decide what staff are worth?
    Mike Kewal, managing director, Sankey Consultancy Ltd:
    “There are a few issues with Christmas Bonuses, a couple more touchier than others, for example do you offer them to Muslims or would they deem it an insult? In general they are good but need to be linked to some sort of “reward” and when most employees get used to getting them, and indeed use the “cash” or whatever revenue it is as part of their funding for the festive season.

    Is it on a attendance basis (good idea but may fall foul if someone has an illness which is blatantly not their fault. Or on company performance (safer). A personal feeling is that the actual amount of the bonus should be the same across the board, for example the admin clerk gets £150 as well as the area manager getting £150. There will be differences in amount in pocket as terry taxman will probably want a bit more from the higher rate tax payers, but hey do they really need it anyway?!”

  • Be careful what you call it
    Tim Edwards, Managing Director, Cahro:
    “Bonuses are designed for reward, achievement and motivation of employees. If they happen to be paid out for “Christmas” then fine but they should be renamed “End of year bonus”, not to offend or compromise our multi-cultural society. I do not necessarily agree that they keep staff happy but to have some extra money whilst many organisations shut down over this period is useful and appreciated.”

  • Christmas shopping day
    Nina Waters, HR Manager, British School of Osteopathy:
    “Working largely in the charitable sector, I’ve not really worked in an organisation that offered a Christmas bonus. We do offer a Christmas shopping day, which goes down well! I would imagine anything that takes the financial strain out of a very expensive time of year can only be a good thing.”

  • Bonus, what bonus?
    Andrew Galer, HR manager:
    “Personally in the last 20 years I have only received a Christmas bonus or present once. Certainly in professional services I have found it is not the norm and there is little expectation of anything. In finacial services it is not Christmas that provides the bonus it is the year end results and these are not a present but a reward.”
  • A time for equality, not performance-based rewards
    Don Rhodes, consultant:
    “Christmas bonuses, albeit money or gifts, remain popular in maintaining the enthusiasm within teams in New Zealand, at whatever level the enthusiasm exists. I say this because they have become almost as much a tradition as the season itself. As with any form of bonus or similar recognition, much depends on the background to the giving, and the manner in which it is given. What is acknowledged nationally here is that this is one time when bonuses etc are more readily accepted ‘across the board’… in other words, it does not matter so much that the best performer in the team gets the same sized Christmas hamper or cheque as the ‘not-so-good’ performer. This is in contrast to more performance based bonuses.”
  • * * *
    Useful links:

  • Christmas bonus on the way out

  • Christmas benefits on the slide as manufacturing firms feel the squeeze

  • Incentive pay: Getting it right. By Dan Martin

  • Off the record: Poor performance, slashed bonus?

  • 2 Responses

    1. PC Madness
      OK, I need to say this I live in a Muslim country with strict religious and moral requirements on daily life. And nobody here is offended by the word Christmas, so I’m completely lost as to who would be offended by it in the UK.

      In fact most of the shops and offices here are packed with Christmas goodies, decorations etc.

      I hate Christmas (bah hambug) and am quite disappointed to find out that no-one else is offended by the sight of all this tat.

    2. Political correctness gone mad
      We are a Christian country, and the festival at the end of the year is Christmas. I do not understand why all of a sudden it is offensive to others to use the word Christmas. I did a straw poll around our works with people of different faiths and not one person said it was offensive.

      Having said that bonuses at any time of the year can cause division and upset unless they are clear.

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