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Christmas Parties: A Cost-Effective Staff Incentive?

By: Garry Crystal - Updated: 6 Apr 2011 | comments*Discuss
Christmas Party Staff Incentive

There are many benefits to providing a Christmas party as a staff incentive. But though the goodwill factor can far outweigh the costs, a Christmas party can sometimes be more trouble than it’s worth.

The Traditional Staff Christmas Party

Many companies have used the Christmas party as an employee perk. While some large companies spend thousands if not hundreds of thousands of pounds on their lavish celebrations, most smaller businesses have a much more modest budget. But even a small party can be an annual highlight and something that employees look forward to throughout the year. However, employers should be aware that some Christmas parties can cost more than originally anticipated, and not just in financial terms.

The Goodwill Incentive

Employees do appreciate some form of thanks from their employers for the amount of work they have undertaken. This is one of the reasons why Christmas parties can often be worth their weight in gold. Employers who do spend money on a staff Christmas party are guaranteed a fair amount of respect, and this type of incentive has been shown to increase productivity. This can be shown in a low-cost way by simply paying for an employee’s night out in a restaurant. Other employers do, of course, hire hotels for the evening and splash out on a free bar.

Team Building

It’s true that a Christmas party can bring employees together. While many employers spend a great deal of money hiring companies to try to instil team bonding, a social event such as a Christmas party can have the same effect. This works especially well during economic tough times when other employee benefits and bonuses have been cut. A Christmas party can instil the idea that all employees are part of a team and that better times are ahead. This is a element of the Christmas party incentive that is impossible to measure in financial terms.

Negative Aspects Of A Christmas Party

There are some downsides to the staff Christmas party, and the cost might not be the major one. Supplying staff with a free bar may seem like a very generous and well-intentioned offer, but this can and has led to employee dismissals. Staff drunkenness is always an issue at parties, but the likelihood of drunkenness and fights occurring is increased with a free bar. This can damage a company’s reputation and can be seriously bad news for the employees involved.

Financial Concerns

The cost of the Christmas party will be an issue with employers, but this can be turned into a positive. Employers can inform their employees that the size of the Christmas party will be dependent on the company’s annual profits, which can boost employee productivity during the year. Some employers who are concerned about money may only pay a percentage of the party. Whatever the choice, make sure that the party planning is not left to the last minute, as costs can also be cut by booking venues early.

Cutting The Cost Of A Staff Party

For employers who are worried about money, here are a few ways to keep costs to a minimum:

  • Employers can suggest they will pay the equivalent amount of money that employees are willing to pay towards a party.
  • A good business negotiator should be able to achieve low prices on Christmas party venues and supplies.
  • Rather than booking an expensive venue, ask employees where they would like the party to be held. This could work out cheaper.
  • Many employees would rather have a financial bonus instead of a party; again this may save money.
  • Avoid the free bar scenario and instead provide a few free drinks at the beginning of the night.
  • Consider holding the party on business premises instead of hiring a venue.
A staff Christmas party can be a cost-effective incentive that will be greatly appreciated by employees. The event itself can increase employee motivation and strengthen relationships between employees and management.

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