Annual, predetermined, lump-sum holiday bonuses are not an effective means of rewarding employees for a job well done. And employers have begun to realize that the annual gift of cash does little to improve employee satisfaction, recruiting, and retention, especially when the gift is expected.
According to a recent study by Bankrate.com, only 17% of those who are expecting a holiday bonus this year intend to enjoy the extra cash in the form of a gift. Instead, 76% intend to use their bonus to pay off bills, their debt load, or add it to their savings. What's more, only a quarter of Americans are even expecting a pay raise or bonus this holiday season.
With the traditional lump-sum holiday bonus in decline, some organizations have found more creative and generous ways to show their appreciation during the holiday season. Here are five examples of how companies are raising the bar on holiday gift giving.
Houston-based oil and natural-gas exploration and production company Hilcorp told employees that if they met certain targets, every employee would receive a $100,000 holiday bonus.
According to a recent report on Houston’s KTVU, that goal was met, and 1,380 employees have since found the full amount sitting in their bank accounts.
This isn’t the first time the company has demonstrated such generosity and appreciation for its staff. In 2010, employees were given the choice between a $50,000 car and a $35,000 cash bonus for meeting a five-year goal, according to KTVU. This is one of the reasons Hilcorp was ranked the 20th best place to work by Fortune.
On top of an annual cash bonus, employees of North Dakota-based Bell State Bank & Trust kicked off a new tradition at their 2007 holiday party. Each year since, its staff have received a sum of money—$1,000 for full-time employees and $500 for part-time workers—to donate to a cause, individual in need, charity, or nonprofit organization of their choosing.
"What's so great about this program is that it’s a grassroots program where we have all 1,000 of our employees looking for needs," says Julie Peterson Klein, the company’s chief culture officer and pay-it-forward coordinator. "They reflect on it, and are very careful about what they choose. They've been such good stewards of the money they've been given."
Employees are asked to take a picture or video, or write an article on the cause they supported, and the top 10 or 15 are showcased at the annual holiday party.
Bell State Bank & Trust’s YouTube page is filled with touching examples of how this money has changed lives in the community, such as the story of a group of employees who pooled their money together to help a man living with cerebral palsy upgrade his wheelchair-accessible van.
"This program has really changed our culture here at Bell because it's all kind of contagious," said Peterson Klein. "When you start to practice random acts of kindness, people want to continue to do more and more, and it spreads throughout our company and the community."
Some companies offer unlimited paid vacation to their staff; however, many have discovered that employees are less likely to take advantage of the time off when they’re not prescribed a certain, permissible holiday period. One such company, Buffer, found that only 9 of its 25 staffers took vacation time in 2014.
"As a typical startup mindset we said 'We have unlimited vacation; anybody can go and take as much time as they'd like,' and in reality we hadn't taken any—and everyone knows that a big part of the culture of the company is by following what the founders do," said Leo Widrich, the COO and co-founder of Buffer.
After three straight years without a vacation, he and co-founder Joel Gascoigne took a badly needed trip to Mexico. Upon their return they decided to implement a policy that would help encourage their staff to take more time off and ensure they didn’t suffer from burnout.
Following in the footsteps of companies like Evernote, FullContact, and others, Buffer now pays staff $1,000 for taking advantage of their vacation time, as well as a $500 bonus for each travel companion. Since implementing the policy last year, 25 of the company’s 35 staff have taken advantage with trips to places like Japan, Hawaii, and South Africa.
"People were so happy, so excited," said Widrich. "Some people with families came up to us afterwards and hugged us and cried and said 'I didn't see a possibility for me to go on a meaningful trip with my family up until this point. This is really going to impact my life in a meaningful way.'"
Ottawa-based e-commerce platform Shopify has consistently surprised its staff with unexpected holiday surprises, many of which tie directly into the company’s history and culture. As a startup in 2011, for example, the company gave its entire staff a custom iPad case made by one of their top performing merchants, DODOcase, only to surprise them again later that day with a free iPad.
"In 2013 we wanted to go back to our roots," said Konval Matin, the company’s culture lead. "Shopify started because [founder] Tobias [Lütke] wanted to sell snowboards, so we took over Tremblant Mountain, and the entire company and their loved ones were there for a full weekend of snowboarding and skiing."
In an effort to help staff become better acquainted with the company’s 200,000 merchants, this year each have been given $1,000 to spend in Shopify digital storefronts.
"It's a bit of a treasure hunt: How many cool things can you find in 200,000 stores?" said Matin, adding that employees are sharing ideas on social media under the hashtag #ShopShopify. "What we're trying to do is create more empathy for our merchants by our employees. It also gives our employees a chance to experience what the customer experiences."
To celebrate the most successful year in its history, West Herr Auto Group, the largest auto retailer in the state of New York, threw a holiday party their 1,850 employees and guests will not soon forget.
The evening was hosted at a local theater and started with a performance by an LED-clad, glow-in-the-dark dance troupe.
"We also outfitted our entire director staff in the same suits," said Jed Hunter, the company’s COO, explaining that the dancers snuck off stage during the performance, and were replaced by the company’s C-suite. "It was absolutely a roar when the lights came up and they saw it was us."
After 45 minutes of performance updates the directors raffled away 52 prizes, ranging from gift cards to vacation packages to cash. They then drew names and called 12 staff onstage for a game of heads-or-tails. "We had two people left, and we walked over to a Mercedes, and I had two keys. I gave one key to each guy, and the guy whose button worked won the car."
If that weren’t enough of an evening to remember, the event concluded with a private 90-minute show by Buffalo-based rockers the Goo Goo Dolls.
"I can't tell you the number of people completely unaffiliated with the company that have come up to me asking about the event," said Hunter. "Our recruiting site has blown up. We've had people left and right trying to come work for us, which has traditionally been our biggest challenge, finding good people to work for our company."