Get Started: Pros and cons of giving gifts to employees

Small business owners who want to give holiday gifts to employees need to be aware that pitfalls can be found in good intentions.

Gift-giving can raise questions about impropriety and favoritism, says Wendy Patrick, a lecturer in business ethics at San Diego State University. Bosses should also be cautious about receiving gifts from staffers, she says.

Some business owners give gifts as a way to thank employees for their hard work and loyalty. That’s a good way to boost morale, but it will only work if everyone gets a gift – leaving someone out will cause resentment and stir up speculation about why some employees are favored over others, Patrick says.

In some very small companies, owners select individual gifts for employees, hoping for a personal touch. That can be troublesome if one staffer believes that another got a better or more expensive gift, Patrick says. The boss is better off giving everyone the same gift, or the same holiday bonus.

“It’s probably safer in the long run to even the playing field,” she says.

Accepting gifts from employees also raises questions – if someone gives the boss something lavish, is it an attempt to curry favor? And if that staffer ends up getting a promotion or plum assignment, was the gift a bribe that worked?

Patrick recommends that business owners set a written policy that says bosses won’t accept gifts. And if they do receive a gift, either return it, or in the case of something like a food basket, set it out so everyone in the workplace can enjoy it. But don’t identify who gave the gift.