How Much Money Should You Give Employees For the Holidays?

24 Nov 2021

Though it’s not required, giving thoughtful holiday gifts to your employees demonstrates your gratitude and recognition for their work all-year long. Giving them a small cash bonus is always appreciated, but how much should you give? This article will explore the best ways to determine an appropriate amount for each employee.

Holiday bonuses can be a touchy subject as the office evolves to accommodate the ever-changing modern workforce. While many startups forego cash incentives in the early stages of their company, more established businesses have embedded them into their culture to the point that they are considered part of an employee’s annual compensation.

Before delving too deeply into the changing office’s patterns, the facts are simple: incentives keep employees happy and increase retention. Bosses want their employees to feel valued, but they don’t want to set unrealistic goals or create needless drama.

The average spending on staff gifts will range from $10 to $50 per employee per event, with a limit of $100 per employee per year, based on the occasion and who you’re sending the gift to.

However, there are several exceptions. You can map out each possible event with just a little planning and understand precisely how much to budget for employee gifts with just a little preparation.

Types of holiday incentives/bonuses

Incentive: based on performance

Reward high-performers with a performance-based incentive. This can be done at the end of the year or can be aligned with your performance review process. Performance incentives not only increase productivity, but can increase job satisfaction, organizational commitment and trust in leadership. However, it’s important to use these judiciously, as employees may feel internal pressure to overwork or compete with their peers. To avoid lowering morale, make sure performance incentives are distributed fairly and that scoring systems are understood by both managers and employees.

Profit-sharing

A part of the company’s income is set aside and then spread equally among the employees. It blends the best of both worlds by keeping things fair and equitable while also encouraging workers to feel like they have a stake in the organization’s growth.

Communication is crucial in this form of bonus: it’s not always obvious to workers how the business is doing from the top down. If earnings, and therefore bonuses, are expected to decline from one year to the next, inform the employees as soon as possible.

Fixed Amount

Everybody gets the same amount of money with this sort of cash bonus. This is an excellent way to maintain employee camaraderie while also distinguishing this holiday gesture of gratitude from something related to pay or success.

Mind that you’re establishing a baseline for the coming years when deciding on an amount. The amount you send this year will most likely need to be increased the next year. If it doesn’t, your workers may demand an explanation.

Wage Percentage

A bonus based on compensation is another choice that normally keeps things civil between employees. This usually equates to two or perhaps even four weeks’ salary, which is why it’s also known as the “13th-month pay.”

This form, like a flat cash bonus, means that most everyone understands why they earned their pay and why the employee next to them could have received more.

Acknowledgment Bonus

An employee gift is a great choice if the allocation for incentives is limited. A gift card, prepaid card, concert ticket, magazine subscription or even a bottle of wine may be a thoughtful gesture that is likely to be more valued than cash.

According to recent reports from the National Retail Federation, the average price of such gifts is under $100. Add a handwritten note if possible; the extra effort would be worth it for your employees to feel valued. Consider offering employees more paid time off or introducing flexible hours during the holidays as substitutes to cash for the holiday bonus.

One thing to bear in mind is the importance of communicating. Prepare to answer to your staff, regardless of the method you chose. Be prepared to answer questions like why you chose that number, why so-and-so got more, and so on.

It is important to be straightforward and truthful with your responses. Implementing a reasonable scheme means that all workers feel valued, which is the whole point of holiday bonuses.


Do you want to buy gift cards in bulk for your employees?

Blackhawk Network is the industry leader in employee prepaid cards and gift cards throughout the United States. Our card portfolio offers all the options you need, including cards that are exclusively ours.

We know choosing the perfect gift for your employees can be extremely difficult and time-consuming, so we offer a full portfolio of comprehensive gift cards unsurpassed in the industry.

From Disney® to Safeway® to The Cheesecake Factory®, we partner with the world’s most beloved brands so you can give gifts that please anyone. Reach out to us now to start a conversation with one of our experts.


← Previous ArticleNext Article →

Contact a Rewards Expert Today