Christmas is the time for generosity and goodwill, and nothing helps to amplify the festive cheer like a well-considered gift. Traditionally, businesses thank their employees for a year of hard work with bonuses and gift cards, but is it what they really want? And more importantly, will it actually make them happy?
To find out, we gave 3,000 UK workers a list of conventional office perks and asked them to pick their preferred Christmas gift. The options were varied, and contained a mix of financial rewards, scenery changes and shifts in personnel.
Show me the money
Perhaps unsuprisingly, an overwhelming 62% of respondents opted for one of the two financial gifts offered to them. The traditional view that money is what employees want, its seems, isn’t unfounded.
However, it’s obvious that offering a blanket pay-rise to your team isn’t feasible, nor is it necessarily the best way to raise morale. Let’s first take a deeper look at the results, before considering some Christmas gift ideas based on actual academic theory.
Head-to-head: a deeper look at employees’ desires
Pay vs. Promotion
62% of survey respondents chose a cash reward, compared to 8% who preferred a promotion.
These days employees are less status driven than they used to be. For the Baby-Boomer generation, the hierarchical corporate ladder meant that success was defined by an executive parking spot and an extra cubicle wall. Nowadays, with workplaces becoming more collaborative and collegiate, the power of a promotion no longer holds the same sway.
When offered the choice of a pay-out, or an upgraded title, it’s no surprise that more respondents opted for the cash.
Pay-rise vs. Bonus
Given the option of an increased pay-check or a lump-sum bonus, employees narrowly went for the former. And it’s the smart choice too.
Bonuses are often dependent on a company’s performance and never guaranteed the following year, whereas once given, a pay-rise is much harder to take away. A pay-rise also tends to follow you between jobs as new employers seek to match or exceed your previous level of compensation. Opting for the pay-rise will help you, as an employee, climb the salary ladder throughout your career.
Time away from the office vs. A better office
Environment plays a key role in employee satisfaction – no one benefits from being confined to a cramped and uncomfortable workspace. Given the opportunity, employees would prefer to get away from the office entirely rather than have improved surroundings for the rest of the year.
Annual leave is an especially attractive perk for the Millennial generation, who tend to value experiences such as holidays and festivals, over material objects like cars and property. Many employers have started appealing to this tendency by introducing unlimited holiday packages.
Employees, however, are likely undervaluing the impact that a great office can make. A 2005 study commissioned by the British government concluded that the link between environment and productivity was “so profound” that innovation in office design was essential for the economy.
An office pet vs. A new manager
Gallup reported that around 50% of resignations cite a bad manager as a contributing factor, so it’s reassuring to see that not everyone is wanting to oust their boss for Christmas. Instead employees would prefer a furry addition to the team.
The benefits of having a pet around the office are so well advertised that even multinationals such as Nestlé have introduced “bring your pet to work” schemes. Research from the Central Michigan University reported that teams rate themselves more highly on measures of intimacy, cohesion and trust when a dog is present in the office.
So a pay-rise will make my employees happy this Christmas?
Well, no. Despite it being what they’re asking for, it’s not that simple. To understand why, we need to look at the two different forms of motivation – intrinsic and extrinsic.
Extrinsic motivation comes from external rewards and influences, for example, being paid to watch and review a new film.
Intrinsic motivation comes from an internal desire to do a task because it is personally gratifying – i.e. watching a film by your favourite director and sharing your thoughts online with friends because you want to.
In 1959, Frederick Herzberg published one of the most influential studies on human motivation: Two-Factor Theory. In it he found that while insufficient extrinsic rewards will cause an employee’s motivation to fall, additional extrinsic rewards will not be able to increase it beyond a baseline level.
That is to say, if you don’t pay your employees a comfortable wage then they will definitely be unhappy at work. However, paying them an excessive wage or bonuses will not unlock previously untapped levels of motivation.
Instead, the key to keeping employees satisfied and engaged with their work is to provide them with the means to be intrinsically motivated.
With that in mind, we’ve put together 3 simple gifts for you to give your team this Christmas that will result in increased levels of intrinsic motivation and a much happier and more productive workforce.
Peakon’s ultimate Christmas gift list
1. Allow employees to be self-directed
In Self-Determination Theory, Ryan & Deci established that trying to control a person’s willingness to complete a task with external rewards ultimately decreases their motivation to do it.
Instead, you should give employees the freedom to approach a task in their own manner. Why? Well, employee autonomy has been shown to:
- Increase creativity; people are at their most creative when they have control over a task.
- Increase development; people advance far faster at tasks when they are self-directed.
- Increase determination; people will persist far longer at tasks when they are personally invested in them.
In a 2014 report, LRN found that only one fifth of businesses exhibit high degrees of employee freedom. Those who do are 10 times more likely to outperform their more traditional competitors in the short term and 20 times more likely in the long term.
2. Provide growth and development opportunities
Providing your employees with a clear career path and development opportunities is a key intrinsic motivator. The theory stems from Maslow’s Hierarchy of Needs and the human desire to achieve self-actualisation – the psychological need for personal growth.
As a manager, one of the key ways you can cater towards this need is by focusing more on mentoring, or what retired Harvard Business School professor David Thomas refers to as building a « developmental relationship« .
According to Thomas, managers who manage for growth and development are far more likely to be have engaged teams and lower churn rates, than managers who manage for performance.
For more information on how to build developmental relationships, check out our mentoring management guide.
3. Show employees that their work is valued
As well as the need for autonomy, Self-Determination Theory describes an employee’s desire for “competence” – the need to seek control and experience mastery. In short, People want to know and feel that they are doing a good job.
Ryan & Deci showed that giving unexpected positive feedback on a task dramatically increases intrinsic motivation, and research from Bersin by Deloitte showed that companies with a ‘recognition-rich culture’ have 31% lower voluntary turnover rates.
The principle of all recognition is showing that you care, so it’s essential that any rewards given show that you care enough to know what someone would really like.
Rather than handing out a generic reward to a member of your team, take the time to make it personal, such as buying them their favourite bottle of wine or craft beer.
Knowing the best gifts for your team requires a level of closeness as a manager, which is perhaps the best reward of all – being able to show your colleagues that not only do you appreciate their effort at work, but you also appreciate them as people.