A Cautionary Tale for Employee Holiday Gifts

The holiday season is upon us and management may be considering giving gifts to their employees. Be very cautious about this policy in your company. On the surface, this seems to be a good gesture to your employees at a festive time of the year, and I am sure that most recipients of holiday gifts are initially very appreciative. But as witnessed by the following true story, giving gifts to employees has the potential for creating more resentment than goodwill.

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Cautionary Tale From Howard Hughes

When I think about giving presents and gifts to employees, I always think about Dr. M. Scott Myers, who was my mentor when I was a training manager at Texas Instruments in the 1960s. Scott was one of the greatest management psychologists and visionaries to have practiced his craft. I was very lucky to have worked with him. Scott told me a Christmas story that he was involved with as a Human Resources Director for Hughes Aircraft prior to WWII. Yes, he actually worked for Howard Hughes.

At that time Hughes Aircraft was a very small company. At Christmas, Howard approached Scott and asked him to give all employees a turkey as an appreciation gift for a job well done. The young Dr. Myers thought this was a great idea, and Howard and Scott gave the 150 employees a turkey. Everybody was happy and very grateful to receive this surprise gift.

The following year, prior to Christmas, people began to ask Scott if they were going to get a turkey again. The company was growing exponentially because of the war and Scott was apprehensive about the logistics of buying and distributing 1,500 turkeys. He approached Howard who said "Sure, Scott. Why not? Let’s give turkeys again this year." The third year, it was a foregone conclusion. If you work for Hughes Aircraft, you get a turkey at Christmas.

By the fourth year, the war was on and Hughes Aircraft had grown to several thousand people. Getting turkeys to everyone was a logistical nightmare. Things got even worse when the union got involved and accused management of giving bigger turkeys to some favored people and arrogantly ignoring the fact that some employees would rather have a ham. Howard and Scott were dumbfounded! How could such a well-intended holiday gesture become so twisted and acrimonious? Nevertheless, a contract was negotiated that allowed the 10,000 employees to choose a ham or a turkey at Christmas time. One year, there was a rumor that the hams had spoiled and the workforce threatened a strike. Finally, management washed their hands of the whole affair and simply calculated the equivalent cost of a turkey or a ham and included the amount in the employees’ paychecks. Although the employees were no longer unhappy about the company "rip-off," there was no evidence that they were either happy or motivated by the extra compensation in their paycheck.

Scott used to say to me, "Brooksie, in the work place, if you give somebody something for nothing, you make them good for nothing." I often wonder if this experience had anything to do with Howard Hughes’ later reclusive years.