Many employers offer their workforce some form of incentive or reward during the festive period. However, in order to minimise the risk of disgruntled employees, employers need to carefully consider their Christmas gestures of goodwill.
First and foremost, organisations must ensure that their employees are treated fairly and consistently. People will talk, and if individuals find out their peers have received a better incentive without reasonable justification, this is likely to lead to a fall out. Even if inconsistent treatment is unintentional, there is still a significant risk that it could lead to upset, and possibly to allegations of discrimination if the employee believes they are being treated less favourably due to a protected characteristic.
Performance-related Christmas rewards and incentives are likely to significantly vary in value and, in principle, such variations can be easily justified. However, as with any other reward or incentive, it is important that the rules and criteria for determining performance-related bonuses are applied fairly and consistently.
Employers also need to take care to ensure that those employees who are on maternity leave or long-term sick leave are not excluded or forgotten. This could also lead to allegations of discrimination.
If offering cash rewards or incentives, employers should consider the messaging that goes out to employees in respect of the payment. In particular, organisations should clearly explain the tax treatment of the payment to avoid any misunderstanding about the sum the employee will actually receive. If the reward or incentive is not contractual, employers may also wish to make it clear that employees should not have any expectation of a reward or incentive payment in future years.
In summary, when rewarding employees at Christmas, the key thing that employers should watch out for is fair and consistent application.
Danielle Crawford is associate solicitor at Winckworth Sherwood
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