The end of the year is rapidly approaching. You want to demonstrate your appreciation for your employees, but don't have the discretionary funds for a large, formal party or bonuses.

As the entrepreneurial boss, you have two criteria to meet:

  • You want to celebrate the holiday season.
  • You want to recognize the efforts and accomplishments of your employees.

If you can't afford to throw a party, don't feel guilty. Often at these events, someone drinks too much or acts inappropriately. This can ruin the fun and create awkwardness at the office for those guilty of indiscretion.

Nevertheless, employees often assume that most companies will have some kind of an end-of-the-year celebration. In addition to celebrating the holiday, it's the perfect opportunity to recognize your employees' efforts and accomplishments. And why not? People need to have their self-esteem reinforced. They try hold the jobs that will bring them the most fulfillment, whether that comes from salary, job satisfaction, status, power or other factors.

And recognizing employee actions, efforts and accomplishments is a very significant way to motivate your workers to increase their achievement levels. When their attempts pay off, they feel satisfied and productive. It's a win-win situation for the employee and the employer.

You shouldn't wait until the end of the year, however, to recognize your employees. You should be doing this on an ongoing basis and certainly during the performance appraisals held semi-annually or quarterly. At the end of the year, you can complement your earlier efforts by publicly recognizing the good work of your employees. Basically, what you want to say is, "We value you and thank you for your performance this past year."

In addition to the formal party, bonuses are another common end-of-the-year way to recognize employee achievement. But a financial reward is just one way to say thanks. It does have some disadvantages.

Some research proves that point. Unfortunately, within a very short period of time, the employee actually forgets about the bonus. In any case, a few months down the line, the money no longer serves as a motivation. In fact, when the Wirthlin Worldwide organization asked employees how they used their bonus money, it found the following:

  • 29 percent paid bills
  • 18 percent couldn't remember where the money went
  • 11 percent purchased gifts
  • 11 percent purchased household items
  • 11 percent put it in savings

Rewarding employees can be done in many other ways using just a little creativity. Here's a list of some alternatives to the typical and expensive company party. Some are especially noteworthy for smaller companies whose budget isn't very large.

  • Take the staff out to dinner.
  • Take the employees to lunch and then give them the rest of the afternoon off.
  • Allow employees to leave at noon on four Fridays during the year.
  • Allow employees to come in late on four Monday mornings during the year.
  • Go to a movie.
  • Recognize employee successes at any of the above events.
  • Provide a certificate for dinner, a spa, a massage, entertainment, sporting events, bookstores, department stores, travel, cooking lessons, cultural events or a weekend at a nice hotel.
  • Contribute to a charity or cause in the employee's name.
  • Distribute a turkey or fruit basket.
  • Have a party for the kids--or nieces, nephews or grandchildren--of the employees
  • Purchase a prepaid credit or gift card.

Participating in community events is another way to demonstrate your company's commitment to the neighborhood. While it does not specifically recognize employee achievement, it does let everyone know that the company is interested in the wellbeing of others and wants to be a good corporate citizen. In so doing, the employees can be proud of their company. Here are a few suggestions for community events:

  • Volunteer at a homeless or women's shelter, a food bank or a soup kitchen.
  • Bring a meal to a shelter and serve it.
  • Collect warm clothes to give away at the shelter.
  • Participate in a clean-up of a local area.
  • Provide gifts for residents at a nursing home or geriatric facility.
  • Volunteer to read at or visit a pre-school or nursing home.
  • Volunteer at a boys or girls club.
  • Help build a Habitat for Humanity house.
  • Ask your employees if they have any charities or causes they would like to help.

Whatever your decision, make sure that your employees feel that you value their participation and involvement in helping your organization reach its goal. Let them know that you have had a successful year and appreciate their efforts.

After all, isn't that the best holiday gift?