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Policies: the gift that keeps on giving

Policies: the gift that keeps on giving (Last Updated On: December 8, 2014)

In the lead up to the holiday season many businesses start planning corporate gifts for partners and clients. Some will also have planned Christmas bonuses for staff. Gifts and bonuses can be great relationship building tools. However, are you aware you may be at risk of conflict of interest, discrimination or misconduct without the right policies in place?

Gift policies

A good gift policy will be able to demonstrate your business’s commitment to impartial treatment of everyone you do business with. There is a risk that the act of giving and receiving gifts may affect your employee’s duties or at its very worst, lead to misconduct. The aim of this policy is to reduce this risk.

A gift policy can include:

  • Limits on gift value: This can help employees exercise sound judgement when faced with a decision to accept or decline a gift from a supplier, customer and any other individual or organisation. This will also help employees decide on what’s appropriate in terms of giving  gifts.
  • Gift register: a requirement for employees to declare any gifts that are received or declined in the course of their duties.

Another option that you may consider is a no-gift policy. The advantage of a no-gift policy is that any grey areas are removed when it comes to deciding what’s appropriate in terms of giving and receiving gifts. Consider whether this would be appropriate in your business.


Bonus and reward systems come in many shapes and sizes. Often the most difficult part is deciding how they are administered. The main questions that are asked around bonuses are:

How do you calculate which employees are deserving and those who aren’t?

Should it be an entitlement or a discretionary reward?

If it’s up to the employees, most will tell you that a Christmas/annual bonus is their right. Businesses need to nip this sense of entitlement in the bud and use bonus schemes as a motivational tool to drive high performance from employees

Best practices around bonuses include:

  • Ensuring that the bonus scheme is discretionary and does not form a contractual entitlement.  Bonus schemes should be set out in your policies and not employee contracts. You should make it clear that you have discretion to amend or remove any bonus scheme at any time.
  • Set clear KPIs for individual staff to measure employee performance against. This will assist you to fairly administer bonuses to exemplary staff and reduce any risk of claims of bias and discrimination.
  • Open communication with staff. Morale can be affected when expectations do not meet reality – it should always be emphasised that bonuses are administered at management’s discretion.

As with any policies, getting these drafted is only the start. Staff training is crucial in ensuring that employees are aware of these policies. A signed acknowledgement from staff on these policies is helpful in case any issues arise.

Policies and guidelines can be the most important gift you can give to yourself: by reducing your staff risk, you can reduce the risk to your business.

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