Ding dong merrily?

One established way for companies to reward staff is to throw an end-of-year party. But is this a valued motivational event, or has the traditional Christmas do had its day? asks Martin Croft

The ancient Romans had a festival in the darkest days of winter, which they called Saturnalia. During Saturnalia, which took place at the winter solstice, the normal social order was reversed: slaves and masters switched places, men dressed as women and beggars were made magistrates. Drunkenness, lewd behaviour and general over-indulgence were the rule rather than the exception.

Sound familiar? Substitute Christmas for Saturnalia (which is pretty much what the early Christians did, in their campaign to hijack and tame pagan rituals) and insert the word “wage” before “slaves”, and you end up with something that sounds very much like the modern office Christmas party season.

But just how much of a staff incentive is the Christmas party? Chartered Institute of Personnel and Development (CIPD) reward adviser Charles Cotton says: “Christmas is the traditional time for recognising staff and showing appreciation for the previous year’s work.” But he adds that employers ought to remember that Christmas is not the only time when rewards should be given: “Employers should think about reward throughout the year. Other forms of reward should be considered, such as additional days’ leave – employers need to think creatively and select a strategy relevant to both the business and employees’ needs.”

While the CIPD may be trying to persuade its members to spread out incentives through the year, the Christmas party is still very much a fixture on most companies’ calendar. A year ago, the CIPD published the findings of its annual Reward Management survey, which contained some interesting nuggets of information about corporate attitudes to Christmas parties.

The CIPD found that 62 per cent of employers meet the majority of the cost of a Christmas party or lunch. However, only ten per cent provide a Christmas gift such as a hamper or vouchers.

Private-sector service employers were the most generous, with 81 per cent providing a Christmas party or lunch. In manufacturing and production, 69 per cent of companies provided a Christmas event. At the bottom of the pile comes the public sector – only 27 per cent of public sector employers stump up for festivities.

drink like the directors

Other research by the CIPD suggests that while more than half of UK businesses have policies on alcohol, these tend to be forgotten or simply ignored at Christmas. This obviously has major implications for staff behaviour. Cotton observes: “If it is your first Christmas party with your employer, take your cue from your bosses. If they are not letting their hair down, make sure you behave sensibly as well. Remember, these events are a really good opportunity to meet new people and network, so try to talk to people you don’t ordinarily work with.”

Companies also have to bear in mind that if they spend more than a certain amount on a staff Christmas party, staff could end up paying tax and National Insurance on it – which can leave a nasty taste in the mouth and is certainly not the incentive intended.

According to the regulations (which can be found on the HM Revenue and Customs website), companies are allowed to spend £150 a head each year on staff entertainments such as Christmas parties before tax and NI kick in. That sounds like quite a lot, but it does cover all staff parties over the whole 12 months – if a company throws both a summer barbecue and a Christmas party for staff, costs soon add up. The £150 also has to include transport costs and overnight accommodation and VAT. Even so, the state is a lot more generous now than it used to be – the total allowance was only £75 until April 2003.

Unsurprisingly, many in the events industry argue strongly that the Christmas party should be a key focus for motivating staff.

Kim Roe, operations director of specialist event management, hospitality and logistics company Circa Group, observes: “The end of year ‘do’ is a great way to boost staff morale and it provides a valuable opportunity to reward people for their hard work during the year. Many staff see the Christmas party as an important incentive. Last Christmas, many of our clients went for themed events. They offer great entertainment value and act as a real ice-breaker for staff to get to know one another.”

Carol Kaye is managing director of event management and organisation specialist Kaye Stewart Associates, which has set up Christmas events for clients including JWT and National Grid. She says: “A lot of companies still see the end-of-year party as a way to thank their staff for their hard work.” She also maintains that taking staff to a nice restaurant or other location is a much better idea than trying to jolly up the works canteen: but that needn’t mean excessive expenditure. “Some of the best parties involve taking over a good restaurant – Chinese or Thai, for instance – arranging some entertainment and making sure people are mixing together.”

treat them, keep them keen

And Andrew Cook, managing director of events organiser Unmissable, suggests that companies should look on the Christmas party as an important tool for increasing loyalty and reducing staff turnover. Cook says: “People tend to look for new jobs after the Christmas break – ‘It’s a new year, let’s look for a new job.’ If, as an employer, you can ensure employees leave for the holiday season with a positive impression of the company, then you greatly reduce the potential of losing staff come January. This is why it’s so vital to do something innovative for your Christmas party.”

Cook adds: “Too many Christmas parties are dull, boring and organised at the last minute, which usually means they are a boozy lunch somewhere followed by a bar or nightclub – or, more commonly, people going their separate drunken ways by about 5pm. With a little bit more planning and imagination, there are a number of alternative ideas you can arrange for your staff, not all of which have to cost the Earth.”

Elsewhere, there is a groundswell of opinion against the traditional staff Christmas party. Jo Malvern, UK marketing director of internet-based customer loyalty and reward scheme operator Pigsback.com, says: “An employee is for life, not just for Christmas. We try to ‘reward’ our staff on a regular basis rather than concentrate on a once-a-year event such as a Christmas bash. We have a regular Friday afternoon cool-down meeting over a beer to discuss the highs and lows of the week.” The company does have an annual “bash”, but it isn’t focused on Christmas. Instead, Malvern says, “we take the entire company away for a night once a year, usually in the spring. The event is focused entirely on team-building fun activities.” When Pigsback opened its London office, having already been running in Ireland for five years, it flew the whole of the Dublin staff over to London. Employees were picked up from the airport in an open-top bus and taken on a tour of the city, which included a trip on the London Eye and a night out in Chinatown.

And the Christmas bash has begun to attract considerable criticism at a time when companies are realising that everything they do – including how their staff behave in public – has a direct effect on their corporate and brand image. Many companies have become so worried about potential problems associated with the Christmas bash that they are taking steps to minimise the risks.

Indeed, according to Cotton, some companies go so far as to book their Christmas parties under false names. “There are a number of reasons for that, but I think it’s mainly to avoid attracting negative PR or being banned in perpetuity from a hotel or bar if behaviour gets out of hand.”

Some companies have begun to give up on the whole idea of the big Christmas bash altogether, in favour of functions at other times. Many employers hold their “Christmas parties” in January or even February, because venues and entertaining tend to be cheaper then. Others, of course, may avoid having the big company do at Christmas because they have significant numbers of employees who are not actually Christian.

the spirit of ill-will

And if employers are beginning to have second thoughts about throwing big Christmas parties, some employees are becoming just as uncertain.

According to a recent survey conducted by recruitment consultancy RPCushing, one in three employees say a big, expensive Christmas or holiday season party does not make them enjoy working for their employers more. More than two-thirds of employees would rather have the cash in the form of a holiday bonus.

Staff are beginning to abandon the Christmas party. As an insider at one major alcoholic drinks company observes: “Over the past few years, I’ve noticed fewer and fewer people bothering to turn up – there’s the hassle of getting to the venue when you can’t drive and so on. You’d have as much fun at an accountants’ Christmas party.”v

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