How to create an effective Christmas incentive strategy


Need to know 

  • Employers must define what ‘effective’ means to their organisation.
  • Employees’ differing cultural and religious beliefs must be identified and respected.
  • A personalised approach can prove to be a win-win for employers and staff.

Christmas may seem like a lifetime away, but now is the perfect time for employers to start planning a festive incentive strategy if they want it to be effective.

A good place for organisations to start is by identifying their strategy objectives and exactly what they mean by effective. Do they mean a strategy that engages staff, that boosts year-end productivity, or perhaps a strategy that simply recognises and rewards employees for their hard work throughout the year?

Benefits budget planning

Careful consideration also needs to be given to budget setting. As limited as an employer’s budget may be, organisations that under-invest in their strategy may find that it turns out to be as effective as having no strategy in place at all.

Christmas incentive budgets can vary hugely between organisations. Employers tend to spend between £15 and £35 per employee at Christmas, says Adam Porter, national sales manager at CottrillsReward. For example, gifts purchased by Harrods’ clients include spa experience evenings, and personalised luxury accessories and clothing. Employers can spend an average of £100, but in excess of £1,000 for senior members of staff.

Employee preferences

Whatever employers’ spend, their incentive choices must be appropriate for their workforce to help optimise the effectiveness of their strategies. This means that organisations must ensure that they understand the reward preferences across the different demographics of their workforce, which they can do by conducting a staff survey, creating focus groups comprising staff representatives or by collecting anecdotal team feedback from line managers.

But Jamie McKenzie, director of marketing at Sodexo Benefits and Rewards Services, says: “Employers need to acknowledge that [preparing an effective Christmas incentive strategy] is not just about identifying different workforce demographics, but also [employees’] different ethics, morals and religious beliefs.”

This means that employers must carefully consider the contents of rewards such as hampers, which remain a popular Christmas gift choice across all industry sectors. For example, alcohol and foods containing alcohol, such as chocolate truffles and cakes, should be substituted for employees who do not drink alcohol or who are perhaps below the UK legal drinking age of 18.

Similarly, beef gelatine-based confectionery and any products containing dairy or gluten may need to be substituted for employees with special dietary requirements. Products made of leather and bone china may also be inappropriate for some staff.

Cultural sensitivities

Employers may also need to factor in cultural differences to their strategy to help engage staff. For example, some Chinese employees may take offence to any gifts with references to the number four, which in Cantonese sounds similar to the word death, and the colours black and white, which are considered unlucky, as are timepieces such as watches and clocks, according to Tracy Finn, head of corporate services at Harrods.

“[Being sensitive to employees’ needs] is just about being aware of cultural etiquette and what the different cultures are sensitive to,” she adds.

This means that organisations with multi-cultural workforces need to recognise various cultural and religious festivals such as Diwali, the Hindu festival of lights, Chinese New Year and Eid-ul-Fitr, the Muslim festival that marks the end of the holy month of Ramadan.

Corporate gift cards

Gift cards are perhaps an easier reward choice for employers to offer staff because of the simplicity with which they allow staff to choose their own gifts. Employers can source gift cards from a range of providers, as well as directly from their choice of retailer.

But Sodexo’s McKenzie says: “Gift vouchers are a one-size-fits-all strategy, which is a bit of a shotgun approach. By 2020, 50% of the workforce will be millennials, and we’re seeing upwards of five generations of workforce within a lot of businesses now. It’s not a one-size-fits-all workplace at the moment.”

Harrods’ Finn adds: “The corporate gift is not as generic as it used to be. Employees like to feel that they’ve been thought about individually and that it resonates with them personally.”

Personalised approach

A more effective approach, and an increasing trend, is for employers to offer staff a personalised gift that can be used every day, such as a purse or a wallet. Such gifts are a win-win for both employees and employers: employees get the pleasure of the gift along with a daily reminder of their employer, which can help to boost their loyalty to their organisation.

Employers may also consider experience-based Christmas gifts, such as spa days and activity-based adventures, which work particularly well for teams. Lapland proved the most popular choice of destination for employers in 2015, along with Christmas markets in cities such as Berlin and sunny destinations such as Tenerife, according to Red Letter Days.

More affordable rewards include employer-branded merchandise, such as pens, mugs and umbrellas.

Employers should also be mindful of how gifts are wrapped and presented. The relatively small effort of ensuring that a reward is beautifully gift wrapped can go a long way in making employees feel valued and appreciated by their organisation, as can a personalised letter to accompany a gift that is sent directly to an employee’s home.

Alternatively, depending on the size of the workforce, gifts may be given to line managers to present to team members individually, coupled with a chat about how much each employee is appreciated for their input into the organisation. CottrillsReward’s Porter says: “Christmas [incentive] strategies are about making the receiving of a gift an experience for employees.”

Measure the effectiveness

Just as they can help ascertain employee gift preferences, staff surveys and focus groups can help employers to measure the effectiveness of their Christmas campaigns.

Employers that offer staff incentives such as gift cards and retail vouchers can also use their reward platforms to track take-up data. However, anecdotal feedback from staff can prove more useful in helping organisations to gauge the effectiveness of their strategy, says Debra Corey, group reward director at Reward Gateway.

Employers can further boost the effectiveness of their Christmas strategies by ensuring that their efforts are part and parcel of an annual reward strategy, rather than an ad-hoc exercise. “Employers need to consider their total reward strategy and consider how Christmas fits into that,” says Corey. “If organisations do something ad hoc, employees will question why they are doing something special for Christmas.”

It may be the case that an ‘end-of-year’ strategy would be more appropriate for some employers than a Christmas-themed campaign, particularly for organisations that would prefer to offer staff a non-religious-themed celebration.

“We refer to Christmas in the UK, but in the US [the season] is referred to as ‘the holidays’ because it’s viewed as discriminatory if you use the term ‘Christmas’,” says Reward Gateway’s Corey.

Other employers may feel that it is more appropriate for an employer to do nothing around Christmas, particularly if its business has been underperforming.

But employers set on doing nothing may want to consider that 41% of employees feel least motivated around Christmas, according to research by Sodexo Benefits and Rewards Services, published in December 2015, so organisations should do nothing at their peril.

exemplarExemplar Health Care offers staff Christmas reward choice

Exemplar Health Care’s pay and benefits manager, Claire Stead, was keen to offer staff an exciting Christmas gift when she took over the management of benefits in January 2015.

After a reward provider market appraisal, Stead appointed CottrillsReward because of the choice of rewards it offers and because of the ability employees have to select their own gifts.

Stead worked with the provider to create a strategy that appealed to the whole workforce, comprising 2,500 staff, of which 80% are female and 20% male.

Exemplar spends £15 on each employee with less than one year’s service and £20 per head for remaining employees. It offered staff a choice of prosecco, wine or restaurant vouchers for Christmas 2015.

“It’s just a little thank you for employees’ work all year and a little something that’s nice to open,” says Stead.

Previously, employees were offered generic retail vouchers and hampers at Christmas.

Stead carried out a follow-up staff survey after Christmas to measure the effectiveness of her Christmas reward strategy. She also listened to anecdotal staff feedback, which was all positive.

“We’ve got quite an open business where employees can talk to us if they’ve got an issue, or if they’re not happy with something,” she says.

She plans to consider a different variety of rewards for staff for 2016, but will continue to offer prosecco, wine and restaurant vouchers because of their popularity.

“[An effective strategy] is about getting the right mix of gifts,” she says. “I work closely with Cottrills to get a good range of ideas and send that to our board of directors for them to approve.”

melanie-laneViewpoint: Festive reward messages should be inclusive

It is important that employers are sensitive to all employees’ religious and secular beliefs over the Christmas period. While it is likely that many staff will be celebrating Christmas to some extent, not all will, and some may want to keep sufficient annual leave for a religious celebration at a different time of year.

This means that organisations should consider the messages that they use in their reward strategies, and ensure that they are inclusive.

Employers also need to be mindful about the way in which they deal with festive-related workforce planning issues.

Leave requests over the Christmas period are a case in point. Under the Working Time Regulations 1998, employees are required to give notice to employers of their intention to take annual leave, and employers are entitled to serve a counter-notice refusing the leave.

In practice, the statutory position is usually varied by a term in an employee’s contract of employment requiring them to obtain approval from their employer before taking holiday. At peak holiday periods, it is then up to the employer to manage and cover workloads.

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A practical way to deal fairly with competing requests is to vary the normal leave request procedure and ask all employees to submit their proposed holiday dates for the Christmas period in, for example, October, in order that the employer can plan a cover or leave rota.

Melanie Lane is a partner in the employment group at Olswang