It’s hard to believe that we are already in the midst of the 2018 holiday season. One question that frequently comes up this time of year is whether employers should consider giving their employees a holiday gift. Hawk Incentives recently conducted a survey on employee attitudes and preferences toward specific workplace reward programs and how they keep employees engaged at work. One of the key findings is that the majority of respondents indicated that holiday gifts can help motivate and engage employees, but many employers do not offer an annual holiday gift.
According to Theresa McEndree, vice president of marketing, Blackhawk Network, “Holiday rewards are intended to thank employees for their contributions throughout the year and motivate them to continue working hard in the future. Our research found that successful holiday reward programs do just that. Employees want to feel appreciated and offering annual rewards at the holidays give them the recognition they deserve while maximizing engagement and overall potential.”
Other key findings of the survey include:
- Less than half of employees receive holiday rewards – 41% of the employers surveyed offer annual holiday employee gifts. Of employees surveyed that currently receive rewards, only 43% currently get holiday gifts, yet holiday employee gifts are one of the top three reward types employees surveyed want to receive.
According to ASE’s 2019 Holiday Schedule and Practices Survey, 31% of Michigan employers plan to give employees a monetary gift for the holiday season and 22% a non-monetary gift. Regarding the value of the gift, 27% will be spending up to $25 per employee, 30% will be spending $26-$50 per employee, and 21% will be spending $51-$100 per employee.
- Employees surveyed prefer gift cards and a personalized experience - Of the employees surveyed that receive holiday rewards or employee gifts, physical gift cards are the most preferred reward. Employees surveyed also reported that their employers can increase the intrinsic value of the reward simply by making it more personal. 40% of employees responded that an in-person delivery from their supervisor or manager adds meaningful value to a reward.
- Holiday rewards motivate and make employees feel valued – 86% of employees surveyed said receiving a holiday gift from their employer makes them feel valued, more than any other reward type. Additionally, 70% of employees surveyed reported receiving a holiday gift from their employer makes them work harder. Finally, when a holiday reward or employee gift is received, 83% of employees said they are satisfied.
When employers consider what type of gift to give, the following should be taken into consideration:
- Don’t tie the gift to performance – a true gift does not have any measures or requirements tied to it.
- Take into consideration the organization’s culture and what would be meaningful to employees.
- Don’t play favorites and be consistent – give everyone a gift that is the same amount or adjust the amount based on the position or longevity, not the individual.
- Use good judgement – avoid gifts that are too personal or could be viewed as inappropriate.
- Keep in mind tax implications when giving employees gifts – almost any gift you give an employee in is subject to income tax and the value of the gift will need to be included in your employee’s year-end W-2. A cash gift, gift card, or gift certificate redeemable for general merchandise (no matter how large or small the amount) will always be taxable.
The IRS does have an exception for holiday gifts if it is considered de minimis. A gift is de minimis if its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical. The determination of whether an item is de minimis must also take into account the frequency with which similar fringe benefits are provided by the employer to employees. De minimis benefits are excluded under Internal Revenue Code section 132(a)(4) and would not be taxable. According to the IRS, if an employer distributes turkeys, hams, or other merchandise of nominal value to its employees at holidays, the value of these items would not constitute salary or wages.
Giving a gift is the perfect reminder that you care about your employees as human beings. It’s a great way for employers to build relationships with their staff and another way to differentiate themselves from their competitors.
Sources: Inc. 11/16/2017, Hawk Incentives 11/15/2018