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The Christmas Bonus: How to effectively reward your employees

By December 3, 2018 May 6th, 2020 No Comments

If you are one of those managers attempting to determine what to do about Christmas bonuses this year, hold your thoughts. Although the Christmas bonus is no longer the “norm,” it is still used in many organisations as a means of rewarding staff loyalty and productivity.

When it comes to end of year gifts, whether financial year or calendar year, business owners and managers have found that cash bonuses are not always what their employees really, really want.

Why cash bonuses are not a winner.

Even though your employees may say they want cash, it’s actually not the best for boosting staff motivation and morale and here’s why.

The rewards efficacy continuum

The cash end of the continuum is more quantitative and financial in nature. It puts people into a calculative mode and the reward begs the question, “Is this a good deal?”  Because of this, cash is less effective at getting results. Whereas travel or tickets to a show or high end merchandise are more emotional in nature and the question becomes, “Do I want it?” The further away from the dollar sign, the more effective the rewards become at changing behaviour.

The problem with gift cards.

Store-specific gift cards are commonly rated as the number one preferred reward in surveys among program participants and many companies have introduced gift cards into their incentive and recognition strategies in recent years.

However, they are simply not as effective as so-called ‘hedonic luxuries.’ Recipients of store gift cards will use them like cash – most likely to purchase everyday items – and never “connect the dots” between their performance and the reward. Further, since these rarely cover the full purchase cost of an item they end up acting like a discount, so the emotional connection is minimal.

Bear in mind that a gift certificate to a spa has very different motivational qualities than a store gift card and is proven to be significantly more effective as the reward is associated with the behaviour.

In order to maximise the results of your Christmas or year end bonus program, choose the rewards that are meaningful to your employees, something they’d love to have but wouldn’t buy for themselves. These reward types are usually on the higher end of the efficacy scale.

So… what are better motivators than cash bonuses?

In general, employee rewards that make a difference around the holiday season (or at any other time of the year) include:

  • Paid time off, also known as “loyalty leave,” is when employees get an extra day of annual leave for every year they’ve been working for the company.
  • Merchandise: Female employees might love Body Shop gift packs or Pashmina scarves since they are luxurious and much-desired, but might rarely justify buying these for themselves, even though they’re not terribly expensive. The latest and greatest (affordable) treats for men include beard oil and portable power packs.
  • Experiences: track days, spa treatments, ghost tours and bridge climbs are great examples of the more popular experiences rewards on offer today.

How Millennials want to be recognised.

By 2020, the Millennial generation will make up more than half of the workforce. By 2025, that number will climb to 75%. They want to be part of the solution. They want you to notice their efforts and they’ll work hard for you if they feel valued.

Millennials prefer more regular, consistent feedback and encouragement. Maybe the speed at which things happen within the digital world we live in has ingrained that attitude into the Millennial generation.

We all know many people who post something on their social media accounts and then check every few minutes to see the “likes” start to come in. If they don’t get noticed in the form of “likes” it can be a real downer for them. With the attention Millennials are getting from their peers outside of work hours, do you think Millennials are getting the same attention from their boss at work? Most likely not. This is the social generation that lives for instant feedback and communication in their personal lives. Now they want it at work.

Because of this, we think it’s important to communicate, encourage, and reward your young, talented Millennials more often and in “real time.” If you think Millennials will be loyal and stick around if you just conduct a once-a-year review with an attached merit increase (like the Baby Boomers did) you’re very mistaken. A routine of awarding bonuses when outstanding work is observed could be the ticket to establishing a successful employer-employee relationship with members of the Millennial generation.

Social recognition is the ideal employee rewards and recognition platform for managers and peers across the organisation to build a culture of recognition, because it offers immediate, specific positive feedback whenever colleagues witness outstanding work and deliver that positive reinforcement at a time when it will be most immediate and impactful. This is a high impact, low cost solution proven to deliver real benefits to the business.

At Brownie Points we believe recognition is not just for Christmas, it should be all year round. Giving positive feedback really works… and we can make it work for you.

Brownie Points is working with thought leading organisations around the world to tailor employee feedback and recognition programs that have a positive impact on the bottom line.

With our growing network of alliance partners, we are able to offer cost effective solutions for any business, with inspiring rewards for your staff.

To learn how Brownie Points could make a difference in your business, call the team today on + 61 (3) 9909 7411 and book a free demonstration, or for more information email us at

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