The definitive guide to giving a great employee gift

The definitive guide to giving a great employee gift

Giving employees the right holiday gift isn’t difficult – for most people, it’s money.

Key Points

  • Somewhere between $50-$100 will satisfy most (67%) employees.
  • People in operations or production, IT, finance, and senior management roles tend to have higher expectations for holiday gifts.
  • Higher-income employees prefer a gift from their boss, while lower-income employees prefer a gift from the company.
  • The right gift boosts job satisfaction for three months or more for around 75% of employees.

Don’t be Chevy Chase’s boss in National Lampoon’s Christmas Vacation. He decided to forgo bonuses in favor of Jelly of the Month Club subscriptions, and Clark Griswold was a bit upset about it. 

According to our recent survey, assorted jellies, gift cards for turkey, and gift cards for small denominations do, indeed, disappoint the vast majority of employees. So, what makes them happy?

Money. Specifically, $50-$100 as an employee gift around the holidays will satisfy 65% of the American workforce. 

And it’ll pay off big for HR professionals and business leaders: about three-fourths of employees reported they experience an increase in job satisfaction for three months or more after receiving the right holiday gift.

But there’s more to the story. Certain demographics have slightly different preferences, and those making more money tend to have more expensive tastes. 

Some people, particularly in IT, expect some level of personalization to their gift, and many have strong opinions about who the gift should come from.

In this guide, we’ll tell you exactly what to get employees, accounting for statistically significant variations across certain roles and salary tiers. 

Fortunately, if you’ve got the right data, it’s a lot harder to screw up holiday gifts. And we’ve got the data. 

Give people money (or time off)

Let’s start with what, exactly, you should give people. 

The majority of people (65%), across age groups, just want money. This makes getting the right holiday gift pretty easy: giving an employee a Visa gift card, money added to their paycheck, or cash will put a little jaunt in their step.

“I just love money,” said one worker. 

In terms of denomination:

  • Somewhere between $50-$100 will satisfy most (67%) employees. 
  • Almost a quarter would be satisfied with a gift that costs up to $50
  • 16% would prefer that the gift run from $501-$1,000. 
A pie chart showing that most employees will be satisfied with a gift that costs under $100.

Tastes do vary a bit, depending on salary and role:

  • A minority (5%) with more expensive tastes expect a gift to cost between $1,000 and $5,000)
  • People with higher expectations tend to be in operations or production, IT, finance, and senior management roles. 

So, those are the guidelines for money. But what ranks highest after a bit of extra cash?

A less tangible gift. 

After money, most people want more paid time off. Importantly, while many people do want the experience of free time, few want a pre-selected experience from their HR department or boss. 

Experiences like wine tastings, comedy shows, etc., ranked quite low on the list of gifts people would put in their top five. 

Ultimately, whether it’s money or more free time, most people just want the gift of choice.

Creating a holiday gifting budget

So, you know what to give employees for the holiday season. But how much will it run you?

It’s best to work out a budget that allows for everyone at the company to receive a token of appreciation: the vast majority of respondents (65%) believe everybody should receive a holiday gift. 

When building your budget, think about two factors:

  • Who receives a gift
  • How much you’ll spend per employee

Survey results are split on the matter of how much to give each employee. Thirty-five percent of respondents say everyone at the company should receive the same amount. This, of course, isn’t a majority, but it’s a sizable percentage. 

Meanwhile, 24% say the dollar amount should increase or decrease based on company or department performance.

“I helped to bring about their products and success, so I should be able to reap some rewards of appreciation for that,” wrote one respondent. 

Another 28% say the dollar amount should be calculated based on individual performance benchmarks, including salary, seniority, and tenure. 

One thing is clear: most employees don’t think a holiday gift is equivalent to a performance bonus. Only 13% said dollar amount should be personalized to each employee. 

Nearly half (44%) of respondents said a gift that costs $100 or less would be ideal. Another 22% said the cost doesn’t matter. So you can satisfy about two-thirds with a gift in that range.

If you’re taking a broad approach to gifting, a $100 gift could be a small price to pay for a big boost in engagement. 

Spread out over a year, that’s 4.8¢ per hour for a full-time employee.

Respondents signaled they’d understand a smaller gift (or no holiday gift at all) when the company isn’t doing great. A little over half of employees said they should only receive a gift when the company is doing well financially. 

“I don’t want company resources to be spent on employees when times are not great,” said one employee.

A pie chart showing that most people believe a gift should only be sent when the company is doing well financiallly.

If you need to make cuts to your holiday gifting program year over year, explaining the rationale goes a long way toward keeping people happy.

Better yet, introduce a tiered system to gifting:

  • Give everyone a set dollar amount (say $50).
  • Depending on company and/or department performance, add a dollar amount.

This helps motivate employees to hit established company goals, and makes the conversation easier if budgets are constrained.

Should you personalize gifts? Yeah, but don’t overthink it.

We know what you’re thinking: there’s a reason they call it “cold, hard cash.” It seems to lack any kind of warmth or human touch.

But the truth is, 85% of employees would be satisfied with a simple 'thank-you' note along with their gift. While personalizing a gift seems important in theory, in reality, it hardly matters to most.

So in terms of determining ROI, don’t sweat it too much. Personalized or not, the important thing is that employers send a gift, and that it’s a gift people actually want. 

Employees in certain professions care more about personalization than others, but interest is still relatively low across demographics:

  • 25% of those in IT/software want a personalized gift
  • 22% in senior management 
  • 18% in marketing
  • 16% in admin
  • 16% in product supply

“Including cash in a holiday card with a personal note of thanks” is enough personalization for most people, respondents said.

“[Gifts] makes me feel appreciated as it usually comes with a nice ‘thank you for all your hard work’ note,” said another.

Sending along a few words of appreciation with the gift seems to be the safest bet overall. 

A chart showing that personalizing gifts isn't that important - most people would be satisfied with a note from their boss.

Here’s a few ways to make this happen:

A note with the money. Gifting and incentive platforms (including Tremendous) make it easy to send an individualized note to each recipient using custom rewards fields. That way, you can tell Alice you appreciate how she helps teammates, Bob can know his patience with difficult clients is a huge asset, etc. Or you can suggest where to spend the money, without obligating them. (Because as our study shows, bosses often make the wrong choice of specific gift cards.)

A separate email. If you’d like to keep things less complicated, simply send a direct email to your employees right after sending them the money.

A physical gift along with money. For a few extra dollars and a little effort, you can come across as particularly thoughtful if you give something relevant to your employee’s interests or needs along with the money. A potted plant, a bottle of wine, or a box of chocolates will show you went the extra mile. It’s probably better to send the money first and then follow up with the physical item, lest the recipient think that’s all you’re giving.

A physical Visa card within a thank-you card. If the physical touch is really important to you, it’s easy and affordable to order prepaid Visa cards in bulk, and then insert them in a handwritten card.

Simply tell them in person. Believe us, your employees will long remember words of praise and gratitude. There’s no need to overcomplicate a positive message if you can deliver it sincerely — and accompany it with a gift that puts your money where your mouth is, of course.

Any of these strategies will suffice for most of the workforce. Interestingly, though, 14% of respondents say the gift must be picked out specifically for them. Tough crowd. 

Consider personalizing gifts for senior managers or IT personnel: they’re the professionals most likely to want something specifically picked out just for them. 

Don’t sign the gift “from HR”. Under any circumstances.

Employees want a gift from their boss or the CEO of the company, with a slight preference for the former. Very few (4%) want a present signed, “from HR”. (When we surveyed HR professionals, unfortunately we found nearly one in 5 who sent a gift signed it from their department.)

It makes sense: ideally, since a holiday gift is a show of appreciation, it means more coming from a direct supervisor who actually sees your day-to-day output. Or from the owners of the company, who oversee all the work that comes out of the organization. 

People in tech, education and health services, and public administration tend to prefer that gifts come from their boss, while people in manufacturing or transportation and utilities tend to prefer that the gift comes from the company owners or leadership team. 

While HR has its role in maintaining employee satisfaction and ensuring everyone feels heard and supported, a gift from the central department that handles all employee matters can come off as a bit impersonal. 

Generally speaking, higher-income employees prefer a gift from their boss, while lower-income employees prefer a gift from the company. 

A pie chart showing that most employees want gifts from the company owners or their boss, but not the HR department.

A quick step-by-step to holiday gifting

In summary, these are the details HR professionals and business leaders will need to work out to ace holiday gifting:

  • Who: If it’s just a few people, you can type their names and emails into most gifting interfaces. If it’s a bigger team, use a CSV file to import names, amounts, and a custom message, if you want to include one.
  • When: If you’re unsure of when to give the gift, perhaps err on the side of earlier in the holiday season. This is particularly important if you’re in retail or another business that ramps up around the holidays. Remember that a majority of employees feel more satisfied with their jobs for weeks or months after the gift. So, why not have that glow begin during the times you’re asking them to work harder, rather than the aftermath?
  • How much: For most employees, a $50-$100 gift feels right. Think very hard before sending less than that, because cheap gifts often backfire. If you’re recognizing higher-paid employees, that might not be enough. Also think about whether it makes sense for your workplace to give everyone the same gift, or to use a formula or other criteria for who gets how much.
  • Sent by: Employees seem split on whether it should be sent from the company leadership or their direct manager. You can make that call. But definitely don’t note HR as the sender, that clearly falls flat.
  • How: At most places of employment, emailed gifts are probably the simplest. 

Conclusion

Giving the right employee gift this holiday season is more of a science than an art. While some HR departments and business leaders may be inclined to give employees festive gifts with a lot of personal flair, it’s best to err on the side of caution and send what they overwhelmingly want: money. 

Gift cards, niche food items, and team dinners tend to backfire more often than not. While thoughtful, these gifts assume a lot – perhaps your employees never eat at Olive Garden, and maybe they don’t need another water bottle. On the contrary, sending $50-$100 to each employee with a note from their boss will put most people in the holiday spirit. And if they so choose, they can spend it at Olive Garden.

For more insights on the science of holiday gifting, check out our white paper.

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