How to reward and incentivise your employees this Christmas

Oliver · 03 Nov

Yes, it’s still November, but hear us out.

For many organisations, effectiveness over the Christmas period is a good litmus test for overall performance – annual targets must be met and customer contracts renewed. Both, of course, require motivated workforces.

You’ve been in the game long enough to know that, where employee engagement is concerned, Christmas counts. You’ll also know that a week is a short time in business.

So before the Chuckle brothers switch on the town centre lights and your inbox resembles a list of tired Christmas puns, now’s the time to plan this year’s reward and incentive strategy.

Why reward?

First let’s remember why we reward at Christmas: to show appreciation towards the people who devote a huge amount of their lives to our organisations. While the human element to this needs little explanation, if you’re building a business case for holiday rewards, you might need more tangible evidence in favour of their value.

Last year, M&S’s corporate wing conducted research to address this ROI-shaped problem. It gathered the opinions of directors and owners of top UK firms – most of which sourced from The Sunday Times 100 Best Companies, The Guardian’s Britain’s Top Employers, and the Great Places to Work Awards shortlist – on the effect Christmas rewards have on performance.

Of companies that rewarded their employees over the holiday period, it found that almost 50% saw an improvement in staff motivation and productivity levels on returning to work in the New Year. Hitting both objectives – the recognition of employee commitment and secondary boosting of long-term productivity – requires a knowledge of what rewards are worth their investment.

A recent McKinsey Quarterly survey shedded new light on the reality of financial bonuses. Some 68% of the 1049 executives and managers it studied said they ‘always’ or ‘mostly’ fork out cash bonuses as an annual reward – yet just 60% believed them to be effective. Nonfinancial incentives, on the other hand, were issued by 52% of respondents with 64% believing them to be effective.


It would seem that if you’re in the business of making returns on your investments (who isn’t?), annual bonuses and straight-up financial rewards aren’t particularly effective. The most impactful rewards come as part of a sustained and authentic employee engagement strategy.

These are the hallmarks of effective rewards and incentives.


As an antidote to the upped intake of mince pies and eggnog, wellness incentives go a long way. According to Workplace Insights, one third of employees resent the lack of wellbeing programmes offered by their organisations. For employers, the benefits of providing wellness incentives are are twofold: they demonstrate an interest in your employees health, while also boosting performance and motivation.

Consider offering your employees wellness incentives of gyms memberships, yoga classes or cooking courses, and your business will reap the rewards of having happier and healthier team members who are statistically less likely to take sick days and suffer from stress.


Any reward you offer will pale in comparison to the time your employees spend with family and friends over the Christmas period. It is, however, possible to use your reward to facilitate and improve that time.

At the higher end, employers are covering the expenses of family weekends away as an alternative to the cash bonus. But if you’re on a restricted budget, incentives along the lines of shopping and restaurant vouchers or discounted experiences are also powerful. Depending on the nature of your organisation, perhaps the most valuable incentive is simply allowing extra time out of the office – whether they spend it with family or in the pub.


Reward and recognition, like dogs and goldfish, are not just for Christmas. While the festive season holds extra gift-giving clout, the downside is that rewards are often quickly forgotten. Incentivising your people throughout the year will improve employee satisfaction and performance.

An employee engagement programme makes incentivisation a year-round thing. These programmes enable managers to reward and incentivise staff throughout the year, perhaps while issuing most substantial benefits around the Christmas period in line with employee performance.


One employee’s orange is another employee’s lump of coal – or however the idiom goes. The point is, a reward that’s tailored to an individual’s taste can have greater significance at less cost. There will inevitably be a degree of diversity in your organisation – be it age, religion or personality – so it’s worth thinking about how your rewards will be received.

The companies that excel in this space – Google, John Lewis, Virgin – are famed for their deep understanding of their people, something that fuels standout employee incentives. The trouble here is fairness, which is why you also need to offer variety....


The best way to ensure your incentives appeal to all is by offering a variety of rewards for your workforce to choose from. The demographics of your organisation should determine the direction in which you take your selection – an office of under 25s, for example, might not be so motivated by family holiday vouchers.

With a clear idea of reward budget per employee, consider conducting a staff survey to identify the how your teams wish to be rewarded. Combine open ended questions with a selection of discounts or vouchers for retail, restaurants, or experience offers.

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