Everyone appreciates a little appreciation at the end of the year. Historically, companies have shown their appreciation with holiday cash bonuses. J.P. Morgan & Company set a precedent in 1902 when they provided each of their employees a full-year’s salary as a Christmas bonus. After that, cash quickly became the standard in the workplace, and was calculated as a percentage of employee salary.

However, a study released today by Hewitt Associates finds that 81% of companies are not offering holiday bonuses this year. One of the main reasons is that while employees appreciate a year-end holiday cash bonus; it’s the first thing to go in a tough economy.

What’s more, many employers are now questioning its effectiveness in building employee loyalty and motivating their workforces for the new year. CNNmoney.com reports that 50% of companies say they eliminated holiday cash bonuses because employees now feel entitled to them.

Whether it is for financial reasons or the belief that holiday cash bonuses don’t provide long-term value, here are two things to keep in mind:


*
Recognition is free! Take advantage of the value recognition brings to your organization. A simple thank you that is specific and timely will go a lot further than a year-end cash bonus in securing employee engagement.

*
Celebrate the year’s success with a holiday team lunch. It gives managers an opportunity to bring the team together and show his/her appreciation. It’s also a way to keep costs down. Want more good ideas on what employers can do? Read Career Builder’s story, Companies Still Planning on Offering Holiday Perks in the Office.

*
Rewards should be meaningful and memorable to the recipient. Too often, holiday cash bonuses are used to pay holiday bills so the meaning behind the bonus is forgotten, and the employee never makes the connection between the recognition and the reward. Try giving employees the ability to earn their rewards throughout the year and give them the opportunity to choose when they receive their reward.

For more on the alternatives to holiday cash bonuses, read Holiday Bonuses to Retire in 2009 on Forbes.com. For more on noncash incentives read our blog posts It’s not about the money.