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Picking the perfect holiday gifts for employees can be harder than you think. You have to choose something that shows your appreciation while also being useful and affordable. This article will help you decide.

It’s the end of the year and what better way to spread the festive cheer than a bunch of employee rewards?

Year-end rewards are a time-honored tradition at nearly every business. It’s a great way to close off a year of hard work on a positive note. And it is perfectly aligned with the giving nature of the festive season.

From treats and cash to extra vacation days, there are a ton of ways to show your employees you care.

I’ll share holiday reward ideas for your agency, as well as help you understand the reasons to choose them.

The Science of Employee Rewards

Before I share a bunch of holiday reward ideas, I want to take a slight detour and touch on the science behind employee rewards.

Despite their prevalence, the truth is that rewards don’t always improve performance or morale. And even when they do, not all rewards motivate equally.

To understand why you first have to understand the difference between extrinsic and intrinsic motivation.

Extrinsic vs Intrinsic Motivation

What motivates you to work harder – in your job, at your hobby, or even at your home?

  • If it is an external reward – better pay or a cash incentive – your motivation is extrinsic.
  • If the reward is personal satisfaction and the joy of doing things right, your motivation is intrinsic.

It stands to reason that both extrinsic and intrinsic motivators impact performance. Better pay can push you to work harder. And a better work culture can help you extract improved performance.

The problem starts when you ignore intrinsic factors and rely exclusively on extrinsic motivation.

Studies show that over-relying on monetary rewards can actually reduce performance, especially on creative tasks. The prevailing theory is that attaching a monetary price to something a person would intrinsically enjoy doing “cheapens” it.

Then there is the “overjustification effect”. According to this effect, offering an external reward reduces a person’s intrinsic motivation to do a task (especially creative tasks). Instead of an internal drive, the motivation shifts to a fixed incentive. When that incentive runs out, so does the motivation.

As the authors of this study note:

“…tangible rewards tend to have a substantially negative effect on intrinsic motivation (…) Even when tangible rewards are offered as indicators of good performance, they typically decrease intrinsic motivation for interesting activities.”

For managers, the takeaway is clear: be careful when offering cash and other monetary incentives this holiday season. They might work for some tasks, but for others, they’ll just reduce employee motivation.

Cash vs Non-Cash Rewards

The first thing you should know is that your employees absolutely do want incentives and rewards during the holidays. One survey found that 37% of employees would feel valued if they received a holiday reward.

Expectations vary across industries. In the retail industry, a majority of employees don’t even expect a reward..(Image source)

What kind of rewards employees want, however, remains complicated.

Employees traditionally prefer a cash bonus. However, a study found that when offered specific non-cash rewards (such as extra vacation days), most employees chose the non-cash option instead.

More importantly, non-cash bonuses had a more positive effect on morale and happiness.

Combined with the bit about extrinsic motivation you learned earlier, this is a good enough reason to stay away from cash rewards. Employees prefer them only when they don’t have any other alternative.

Instead, give your employees something that has more lasting value – a few extra days of paid leave, a travel incentive, charity work, or even a social event.

It is the season of giving and gatherings; throwing cash into an envelope doesn’t always capture the spirit.

Individual vs Group Rewards

Most businesses reward individuals, but studies show that that might not always be the best course of action.

One study found that when teams were rewarded as a group (instead of individuals), it produced more cooperative behavior and better teamwork. Another study found that in closely knit teams, seeing their friends receive gifts helps individuals “bask in reflected glory”.

A meta-analysis of reward programs found that team-focused rewards have a bigger impact on productivity (Image source)

One solution is to reward both individuals and teams. Brooks Mitchell of Snowfly recommends a 75-25 split between individual and team rewards.

Another tactic is to offer a “prosocial” reward. With this approach, you give individuals money to spend on their colleagues instead of themselves. One study found that such prosocial bonuses improve workplace performance as well as personal happiness.

It’s easy to see why – in the season of giving, being able to give your friends at work a nice gift would make you feel happy.

So before you gift individual team members holiday gifts, think about how it will impact your teams. Perhaps you can try group or prosocial rewards to make the team feel valued as a whole.

25 Holiday Employee Gift Ideas

Now that you know the science behind choosing rewards, let’s look at some tangible holiday reward ideas for your agency:

1. A chance to gift others

Take a leaf from the “prosocial” rewards playbook and give your employees a chance to choose gifts for their colleagues. Offer each employee a cash component which they can use to buy any gift for a colleague.

It’s perfect for the season of giving and will make both gifter and recipient warm and fuzzy inside.

2. A favorite food item

Giving employees a food product they might enjoy – steaks, chocolates, gourmet cheeses – is always a good time. But you can take things up a notch by personalizing your selection. Give each employee a food item they particularly like to show that you understand and care about them.

3. A charitable donation

Take CSR one step further this season by getting your employees in charitable work. You can volunteer time or make a contribution in the employee’s name to a well-liked local charity. Not only is this a thoughtful gift, but it also fits the spirit of the season.

4. An extra vacation day

In the business holiday season, the best gift you can give anyone is time. Adding even a single day to your employees’ benefits package for the year will have a bigger impact than any cash or kind gift you can think of.

5. Give “consumable” gifts

Managers often make the mistake of giving their employees large, unwieldy gifts. Avoid this error by giving consumable items instead – high-grade olive oil, wine, gourmet foods, etc. Your employees will appreciate the lack of clutter.

6. Hobby-focused gifts

Know an employee who loves to make music? Gift her a new microphone or speakers. Such hobby-focused gifts are a great hit because they show that you know and care about the employee. Seek help from the employee’s colleagues if you don’t know about her hobbies.

7. Tea or coffee-focused gifts

As any agency veteran will attest, this business would collapse without a regular dose of tea/coffee. Premium tea leaves, high-end coffee beans, teapots – these all make excellent gifts. Buy them in equal proportion to both tea lovers and coffee lovers get to take their pick.

8. Indoor plants

Employees in agencies tend to be forward thinking and environmentally conscious. Give them an indoor plant to brighten up their home/work space. Just make sure to pick a low-maintenance variety such as a snake plant, succulents, or jade.

9. Sports-themed goods

Your office probably has at least a few serious sports fans. Make their holidays better by giving them a bucketful of goodies from their favorite sports teams.

Once again, a gift like this shows that you care enough to learn about their favorite teams. Just make sure to not give a Lakers fan a Celtics jersey!

10. Fandom-inspired goods

I bet there are more than a handful of employees who can’t stop talking about Game of Thrones and Harry Potter. Fandom is widespread, especially in pop-culture obsessed agencies.

Gift these employees goodies from their favorite comic, TV series of book. Like the sports-themed gifts, it’s a good way of showing that you care about their likes.

11. Books

When all else fails, you can always turn to books as your holiday gift. You get bonus points for picking up books that would appeal to individual employees’ interests and likes.

12. Treat boxes

Halloween might be behind us but that’s no excuse to not get treats. A bunch of treats packed neatly into a box will always be a hit around the holiday season. Even if the employee herself doesn’t care much about sweets, someone in the family (mostly, kids) will.

13. Restaurant gift cards

Everyone appreciates a good meal. This is why a $50-$100 gift card to a top local restaurant is a proven gift idea. For added impact, pick a restaurant that serves the employee’s favorite cuisine.

14. Craft and art supplies

Agencies are filled with creatives and what better way to make them happy than a brand new set of art supplies? Good sketchbooks, pencils, paint brushes – the designers in your agency will appreciate them all.

15. A “no questions asked” day off

Make your employees’ year by giving them one day off, no questions asked. This would be in addition to their existing sick leave and vacation days. Just ask them not to take off before a crucial client presentation or launch.

16. Typography-focused gifts

There is a whole range of typography-focused gift options, from the Helvetica documentary DVD to font-themed shower curtains and posters. The creatives in your agency will definitely appreciate this gift option.

17. Pantone gifts

Creatives in your agency swear by Pantone. And while you might already have the company’s color swatches, Pantone also offers a ton of other gifting options. This includes everything from coffee mugs and water bottles to foodie cookbooks and color detectors.

18. Board games

As strange as it might seem, we’re in the golden age of board gaming right now. Hop over to Kickstarter and you’ll see more innovative board games than you can ever hope to play in a lifetime.

Board games are a quirky gift choice, but enthusiasts will appreciate them a great deal. Moreover, you can have a gaming session with office colleagues for a great team bonding time.

19. A course or conference ticket

Few gifts will have a bigger impact than the gift of learning. Picking up new skills is particularly important in the fast-paced agency business. Help your employees learn more by gifting them a course they’ve wanted to take or book a ticket to a conference they’ve been eyeing for a while.

20. Create an “upgraded” swag bag

Giving your employees a bag filled with your agency-branded tees and sweatshirts is a cheap way to get out of holiday gifting.

But what if you “upgraded” your swag by giving them personalization options as well as a choice of items?

Such upgraded swag bags will win you a lot of favor. Add a personalized note to their bag for an even bigger impact.

21. Sleep-inspired gifts

Agency work can be tough. The least you can do is make your employees’ sleep comfortable. There is a plethora of sleep-inspired gifts to choose from – Beddit sleep monitor, Ostrich pillow, sleep-inducing aromatherapy candles, memory foam nap mats, etc.

22. A mobile desktop

Working at an agency is all about putting in late nights and working on the road. Make your employees’ jobs easier by giving them mobile desktops. These are lightweight tabletops you can use on your lap while seated or lying down.

Perfect for those late night creative sessions.

23. Grocery store gift certificates

While being sentimental is perfectly fine, employees often appreciate practical gifts more. And what gift could be more practical than a gift certificate to a local grocery store?

Try to pick a grocery store that is close to the employee’s home, or one she already visits. This way, you can guarantee that your gift will be useful.

24. Spa, gym and activity-inspired gift certificates

Continuing on the wellness theme, gift certificates for a local spa, gym, or activity such as rock climbing, mountain biking lessons, etc. are a good idea as well. Just make sure that you don’t give certificates for an outdoor activity if it gets cold in your area.

25. Create a mixtape for each employee

Remember how excited you used to be when you received a mixtape back in the day?

Just because you have Spotify now doesn’t mean that you can’t create a mixtape. A set of each employee’s favorite songs (or at least songs you think they’d like) burned onto a CD and wrapped in a personalized package is a great but affordable gift.

Your people will remember the gesture far more than some cash stuffed into an envelope.

Over to You

You’re spoiled for choice when it comes to picking a holiday gift for your agency employees. But not every gift has the same impact. Gifting only a few individuals instead of the whole team, or offering monetary rewards can actually backfire.

Use this list of to brainstorm ideas for your gifts this holiday season. Just make sure to be quick – the holidays are right around the corner!