Reward and incentive ideas for Christmas

If you read nothing else, read this …

• Employers are becoming more creative with Christmas incentives.

• Incentives and gifts offered as part of a festive motivation scheme must appeal to all staff and take account of different beliefs and religions.

• There is often a clear correlation between incentives and performance, and Christmas can be a good time of year to capitalise on this.

• Employers must consider how to include temporary staff in schemes.


Case study: Timothy James shuts up shop

Timothy James Consulting is one of the few employers in the recruitment industry to shut up shop over Christmas as a special thank-you to its staff.

Managing director Christopher O’Connell says: “Shutting the office over Christmas is virtually unheard of in recruitment, so it gives us a strong unique selling point when interviewing potential staff. It also ensures everyone
returns refreshed after the winter break and positive about starting a new year.”

The company also likes to throw an imaginative and inspiring Christmas party. “We hold a large party for the whole company, with music, food and entertainment like magic tricks or acrobatics,” says O’Connell. “We try to do something a little different rather than centring it around alcohol. We find this creates better and stronger memories for our staff.

“We create a present for each member of staff based on something unique to them. This does not have to be expensive, but makes each employee feel valued.”

Past gifts have included a top hat, a photography shoot and surfing gear.

Employers may already be looking ahead to Christmas, but there are several factors to consider if they are planning rewards and incentives for employees, says Georgina Fuller

It may seem like summer is not long gone, but annual Christmas party plans are probably already under way for many employers. And although some might think incentives are not just for Christmas, the festive period is, arguably, one of the most fruitful times for launching a reward scheme.

Andy Philpott, marketing director at Edenred, says: “Christmas is a crucial time for many businesses as it is the period that will determine whether yearly targets are achieved, and whether customer contracts are renewed. So it is a time to incentivise staff to drive sales and build goodwill.

“The period leading up to Christmas and immediately afterwards is a great time to launch new employee savings propositions, enabling staff to save money at what is traditionally an expensive time of year.”

And it seems employers are getting more creative with their reward offerings. Cinema tickets, cooking classes with celebrity chefs and grow-your-own-Christmas-tree kits are just some of the rewards now on offer. In many organisations, it is often a case of the quirkier the better, says Kuljit Kaur, head of business development at P&MM. “Incentives can be as quirky as people want. It is not a case of what’s on the market, but of what does the organisation want to achieve in line with its culture, values and people.”

The way employers are communicating and engaging with staff about their incentive schemes is also changing rapidly. “Some might use a Facebook-style communications channel or vox pops for people to record what they have achieved, how they feel and what they want to see included,” says Kaur. “Or internal webinars to promote and engage.”

Trip to the moon

Chance-of-a-lifetime and dream-come-true incentives are also becoming more popular. “Someone even enquired about a trip to the moon and the chance to surf naked at Bondi beach,” says Kaur. “There is no limit to the remarkable experiences that staff dream of.”

But employers should try to ensure incentives appeal to all of their staff. “They must be careful not to adopt a one-size-fits-all approach, but tailor incentives to the requirements and lifestyle of the workforce,” says Edenred’s Philpott. “Christmas-themed incentives can work well.”

But sometimes, choosing the right gift for staff and striking the right note can be tricky. Steve Baker, head of recognition and incentives at Grass Roots, says: “While there has been a long tradition of giving hampers, wines, beers and champagne as Christmas incentives, this may not always achieve the effect you desire. We all know how hard it is to choose gifts for family and friends that we know well. Trying to guess what will appeal to staff is even harder.”

Baker recommends offering a wide range of rewards, including retail, leisure, travel and experience options, to appeal to everyone.

The timing of a motivation programme is also critical. Incentives are not just for Christmas and an effective motivation scheme should engage staff well beyond the festive period. “Think about how many days of productivity and performance are lost in the first few days of the new year due to the ‘January blues’,” says Philpott.

“Employers can address this by splitting the reward process, giving part before Christmas and a surprise part waiting for employees when they return in the new year in order to make an immediate impact and generate engagement for tackling targets in the year ahead.”

Including temporary staff

Employers must also consider how to include temporary and seasonal staff in festive incentive plans. Organisations may want to ensure temporary staff receive an appropriate ‘thank-you’ for their efforts, and as cost and flexibility will be critical factors, vouchers can be a popular choice here.

But Rebecca Strevens, solicitor at law firm Charles Russell, warns employers to be aware of the distinction between temporary and permanent staff. “The treatment of such individuals compared to company employees is one factor considered by tribunals in determining employment status,” she says.

If an organisation treats temporary and agency workers the same way as permanent staff, a tribunal could argue that they have the same employment rights.

There are other legal issues employers need to be aware of when offering Christmas incentives. A bottle of wine or whisky has traditionally been a popular Christmas present but, as with the annual Christmas party, employers must take into account their multicultural workforce to respect all employees’ religious beliefs.

Workplace parties are often a relatively cheap and effective way of rewarding staff but they can be a nightmare for HR managers, says Strevens. “As the mulled wine flows, comments made between co-workers can turn from innocuous banter to sexual harassment and some may publicly overindulge in alcohol.”

Party misconduct

Any misconduct at the annual Christmas party needs to be investigated fully, Strevens advises, and any subsequent action must be carefully considered. “If an employer has condoned or encouraged drinking, this could be a mitigating factor,” she adds.

Not all employers use the festive period to launch new reward plans. Neal Blackshire, benefits and compensation manager at McDonald’s Restaurants, says: “We do not operate any specific themed Christmas incentive scheme. We have three bonus schemes, which collectively cover all employees and are based on defined business metrics.”

The bonus schemes run throughout the year, says Blackshire, but the fast food chain does throw a big Christmas party a black-tie dinner for all office staff at its London headquarters. McDonald’s 1,300-plus restaurants also organise local celebrations.

Blackshire is certain about the link between incentives and performance. “We have partnered Lancaster University to carry out research and have firm statistical evidence that shows the link between our employees’ engagement, customer satisfaction and business results,” he says.

Grass Roots’ Baker also believes there is a clear correlation between incentives and performance, and that Christmas is often the best time to capitalise on this. “For some employers, Christmas is an appropriate time to say thank-you and to launch plans for the new year,” he says. “For others, the festive period is a key trading time and incentives can be a cost-effective way of engaging and focusing staff on maximising sales.”

So, be it through parties, presents or pay, employers showing they appreciate and value their staff at Christmas can ensure they start the new year on the right note.


Effective Christmas incentives

1. Set the correct objectives: incentives should always be specific, measurable, achievable, realistic and timed.

2 Communicate well: any incentive scheme will not be effective if it is not communicated clearly.

3 Know your audience: just because it is Christmas, buying alcoholic gifts for people who do not drink, or meat hampers for vegetarians, will not go down well, so rewards will require some thought.

4 Plan ahead: Christmas is one of the busiest times for suppliers, so make sure you know your reward requirements in good time to avoid disappointment.

5 Know your budget: work out exactly what you have to spend and do not forget to incorporate any possible delivery charges for the rewards.

6 Undelivered rewards: make sure you know if someone will not be available to accept delivery of their reward because receiving a gift after the event can be disappointing.

7 Offering choice: one of the most important factors with any incentive scheme is to offer a choice of rewards. This is especially important at Christmas, when money is tighter than usual.

8 Have fun: Christmas incentives give you a great opportunity to have some festive fun in the workplace while also giving a boost to performance.†

Source: Grass Roots


Legal low-down on incentives

• Gifts to employees may be considered as an alternative to cash bonuses, but the tax implications of this decision should be addressed because gifts will normally be treated as a taxable benefit in kind by HM Revenue and Customs.

• Employers should consider whether employees have a contractual right to a bonus, discretionary or otherwise. If
employers choose to pay a Christmas bonus each year, this may inadvertently entitle employees to an annual bonus.

• As Christmas is a Christian holiday, employers should be considerate of employees who have different faiths when arranging office Christmas parties and handing out gifts.

• Employers should ensure that individuals who are out of the office on maternity leave, additional paternity leave or long-term sick leave are invited to any Christmas festivities and are properly considered for any gifts or bonus payments.

• After the implementation of the Bribery Act 2010 on 1 July this year, corporate Christmas gifts to or from customers, clients, suppliers, and so on could be considered unlawful. Employers should implement a Bribery Act policy and actively enforce it by ensuring that employees are aware of both the policy itself and the implications of non-compliance.

Source: Charles Russell

Read more on motivation and incentive schemes