The end of the year is almost here, and hopefully it’s been a great one for you and your company. As a business owner, you know how hard it is to get great results, and you also know how hard your employees work to meet their goals. If you’ve been successful this year, rewarding your employees is an important way to show your thanks and help motivate them for 2016.
Finding the perfect reward can be difficult especially if your finances are tight. Here are some steps you can take to determine the best way to reward your employees for excellent work in 2015.
Determine Your Budget
Before you can decide on a definite reward for your employees, you’ll need to know what you have to work with. Not all rewards have to be expensive, so don’t feel like you have to impact your bottom line in order to say thanks.
Take a look at your overall finances, and consider the number of employees you have. You’ll need to make sure you gift everyone at the same level with the same reward unless you already have some other system in place. You don’t want your reward to your employees to cause tension and jealousy!
Once you’ve determined a budget, you’ll be able to decide if you want to give a physical gift, cash or a non-monetary reward.
If You Reward Your Employees with A Gift or Cash
At the end of the year, cash can be a much needed and welcomed reward. Employees are likely spending money on holiday arrangements, gifts and travel, and December can be a tough month on their personal budgets. Cash makes it easy to please most employees and they can spend it any way they want. Remember to keep in mind that cash awards have tax implications. If you don’t withhold a certain portion for taxes, the employee may end up paying additional taxes themselves.
Giving gifts can be another thoughtful way to reward your employees. Small gifts like turkeys, a movie ticket or inexpensive candles may be considered nominal. If the total value of your gifts for the year is low enough to be considered nominal, you may be able to avoid taxes. Additionally, a personal touch can convey more appreciation than cash. Someone who knows the employee well can select the gift, or you can work through a company that has a catalog for employee appreciation.
Regardless of the reward you choose, you’ll want to work with your accountant to make sure you don’t have to withhold additional money from your employees’ paychecks to cover taxes. That can cause irritation and frustration rather than gratitude.
If budgets are tight or the tax situation seems like too much of a headache, consider giving a non-tangible gift. You can hold an end-of-year event, or offer your employees an extra vacation day.
Offering time off can be especially great because everyone enjoys having unexpected free time. You don’t have to worry about extra taxes or employee deductions. If you can offer everyone an especially coveted day off, like the day before or after a major holiday, you can improve employee morale.
In many businesses, giving the whole team a specific day off isn’t practical, but you can still offer an additional personal day. You may want to specify that it needs to be used during a specific time – by March 31, 2016, for instance.
Making the Announcement of a Reward
When you prepare to announce the reward for your employees, you’ll want to think about how to do so in a way that best conveys the reasons behind the reward. Make it clear if the employees can earn the reward every year or if this is a one-time event. Make sure everyone understands if it’s a reward based on their specific performance or if it’s simply a gift of your gratitude.
Announcing a reward to your staff can also be a great time to highlight your company’s results and thank specific staff members who contributed significantly to those results. If practical, have a company meeting rather than simply sending an email. It’s more personal and gives you a chance to convey the emotion behind your announcement. If a meeting isn’t practical, consider sending out a video for a more personal touch.
Having a great year in your business is an amazing feeling, and you want to make sure you can repeat those results in 2016 and beyond. By offering a reward to your employees, you’ll thank them and motivate them to continue their hard work.
For more information and advice about rewarding your employees, contact me today,