At this time of year, gift-giving is customary. Recipients include, of course, family and friends—as well as those who contribute to the success of our businesses. Valued customers, vendors, and others who support and sustain us often receive gifts during the holidays. Many companies give year-end gifts or bonuses to their employees in the form of cash, gift-cards, or merchandise.
For all of its positives, gift-giving to employees often carries subtle and perhaps unintended messages. These include employee misperceptions about why the gift is being given, the value of the gift, entitlement expectations, and how the gift fits in the context of company success.
Here are four keys to avoiding those misperceptions:
- Misperceptions about why the gift is being given: Virtually all misperceptions regarding holiday gifts extend from this one. So, what is your intention for giving a holiday gift or bonus? Is it simply to acknowledge the season? Is it to generally recognize your people for their work and the successes they have created in the past year? Or is it to express gratitude to specific individuals for their contribution?
Start with your own answers to these questions. Then, discuss them with your management team. Before deciding on what the gifts should be, be clear on why you will give them. And, when they are given, make sure that you communicate clearly the message you want to transmit, as well as what you do not mean to convey. If you simply want to wish everyone a Merry Christmas, be sure that everyone knows that your gifts are not connected in any way to performance. Or vice-versa, if that is the case.
- Misperceptions about the value of the gift: Will all employees receive the same gift or Christmas bonus? Or will some receive more than others? Is your bonus a function of a formula based on company profits?
Employers often correlate bonuses to their employees’ respective salary levels, especially when the intent of the bonus is to share in company financial success. If that applies to your company, be sure that this is clearly communicated to all employees.
Recognize that this type of bonus system often creates grumbling among front-line employees (the rich getting richer, while the rest of us are thrown a bone). In that regard, scheduling such bonuses in the holidays may not be good timing. Consider moving them to another time of year.
On the other hand, gifts of the same value, unless considered generous, are often viewed as trivial, especially when the company has enjoyed financial success.
The best way to eliminate these misperceptions is to address them openly, first with your executive team, and then with other employees.
- Misperceptions regarding entitlement: In the early years of the new millennium several of my clients enjoyed significant financial success and gave large year-end bonuses to their employees. As you might imagine, this was perceived very positively. However, at the end of 2008, economic recession had substantially constrained the finances of these companies, forcing them to eliminate the bonuses. Many of their employees reacted with despair and even anger. They had come to expect big bonus money, basically relying on it as part of their compensation. They felt entitled to it, and when it went away, they were hurt. Leaders must be crystal clear regarding gifts, especially performance-oriented bonuses. What good times bring, bad times can—and will—take away.
- Misperceptions regarding the broader message that gifts send: Because of the positive message holiday season gifts generally send, we have observed that some employees interpret that positivity with an “all is well” pronouncement. One client company executive boldly stated that their Christmas bonuses were evidence of their “competitive unassailability” at their company-wide Christmas party. I shuddered when I heard him say this! The message that many of his employees received was that it was okay to “rest on their laurels.” And that is what they did. In less than two years, the company had become a skeletal version of itself.
Holiday gifts are generally meant to acknowledge the season and reinforce the sense of unity, of common purpose among team members, not to imply the achievement of ultimate business success.
On an individual basis, we should recognize that the greatest gift we give our employees is not their holiday bonus. It is how we interact with them on a day-to-day basis throughout the year. Where we are sincerely and continuously engaged in counseling together with employees, misperceptions regarding holiday gifts are almost always avoided.
Richard Tyson is the founder, principal owner
and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses.