Can Your Company Holiday Party Actually Disengage Employees?
The holiday party is coming up.
You book a venue. Choose the menu. Add a few drinks. Maybe a DJ, an activity, some prizes.
The goal is usually pretty simple:
Thank your people and give them a great night.
And there are plenty of good reasons to do it.
After a full year of working together, getting everyone out of the office can create memories, strengthen relationships and give people a chance to connect in ways that rarely happen between meetings and deadlines.
But there’s another side to the company holiday party that we don’t talk about nearly as much.
The moment you decide to host one, you also create expectations.
Deliver an experience that makes people say “Wow, they really thought this through,” and the impact can be incredibly positive.
But what happens when employees leave thinking:
“Seriously? That was it?”
Or worse:
“After the year we just had, this is how they thank us?”
Can an event designed to engage employees actually do the opposite?
Research offers some interesting clues.
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A party isn’t automatically a positive experience
Believe it or not, someone has actually studied the company Christmas party.
In 2023, Leipzig University researcher Hannes Zacher published The company Christmas party and employee happiness in Scientific Reports.
The question was surprisingly practical:
What makes employees satisfied, or dissatisfied, with their company Christmas party?
Zacher surveyed 359 employees from different organizations in Germany shortly after their holiday parties. The research looked at everything from location and activities to alcohol consumption, formality, speeches, symbolism, employee involvement in planning and inappropriate behavior by managers or coworkers.
The results are worth paying attention to.
Parties held away from the workplace, with fun activities, a more informal atmosphere and symbolic elements were associated with higher satisfaction.
On the other hand, heavy drinking and formality predicted greater dissatisfaction. Inappropriate behavior from supervisors and coworkers was also associated with some forms of negative emotion.
Even relatively small details mattered. Providing both alcoholic and non-alcoholic beverages, for example, was among the characteristics associated with lower dissatisfaction.
In other words:
Simply throwing a party doesn’t automatically make it a positive experience.
Obvious?
Maybe.
But important.
Because the experience isn’t happening in isolation.
It is happening because of the employer.
And employees can walk away associating that experience with positive emotions or negative ones.
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Your holiday party is also sending a message
Why should one evening matter at all in the relationship between an employee and an employer?
To understand that, it helps to look at a much broader concept in organizational psychology: perceived organizational support.
In plain English:
Do I feel like my employer values what I contribute and genuinely cares about my well-being?
James Kurtessis, Robert Eisenberger and their colleagues conducted a major meta-analysis on the topic, published in the Journal of Management.
This time, we’re not talking about a few hundred participants.
The researchers analyzed results from 558 studies.
Their findings broadly supported organizational support theory: employees form perceptions about how much their organization values their contribution and cares about their well-being, and those perceptions are connected to their relationship with the organization and their work, as well as performance and well-being.
What does that have to do with a holiday party?
The research wasn’t about parties specifically, so we shouldn’t pretend it proves something it doesn’t.
But it does help explain something important:
Employees interpret the things their organizations do.
A holiday party can therefore become more than dinner, music and a couple of drink tickets.
It can become a signal.
Imagine a team that has just made it through an incredibly demanding year. The company organizes an evening that genuinely reflects who they are, recognizes what they accomplished and pays attention to the details that matter to them.
The reaction you’re hoping for probably isn’t:
“Based on the venue and catering, I estimate they spent $327 per employee.”
It’s much closer to:
“Wow. They really thought about us.”
That distinction matters.
Because the perceived value of an experience isn’t necessarily the number at the bottom of the invoice.
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But what message are you sending when expectations fall flat?
Now imagine the opposite.
The company has had a fantastic year.
Employees worked incredibly hard.
For months, leadership has been saying:
“We couldn’t have done this without you.”
Expectations build around the year-end celebration.
Then the party arrives.
It feels rushed. The experience doesn’t fit the team. Some employees feel overlooked. And suddenly, the event seems strangely disconnected from everything leadership has been saying all year.
To be clear, there isn’t research showing that one disappointing holiday party automatically causes employee engagement to drop.
But decades of research into organizational justice give us good reason to take perceptions of fairness and treatment seriously.
In 2001, Jason Colquitt and his colleagues published a major meta-analysis in the Journal of Applied Psychology, reviewing 183 organizational justice studies conducted over the previous 25 years.
They examined different dimensions of workplace fairness, including how outcomes are distributed, how decisions are made, how people are treated and how decisions are explained.
Those perceptions were related to important workplace outcomes including job satisfaction, organizational commitment, withdrawal and performance.
Again, these researchers weren’t studying Christmas parties.
But their findings raise an interesting question.
What if the real problem with a disappointing holiday party isn’t mediocre food or a bad DJ?
What if it’s sometimes the gap between the message employees have been hearing and the message they feel the experience actually sends?
“You’ve been telling us all year that people come first. Tonight doesn’t really feel like it.”
At that point, the issue isn’t really the party anymore.
It’s the signal.
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Your holiday party may be part of your culture
There’s one more piece of research worth considering.
Tami Kim and her colleagues studied group rituals in the workplace.
Across five studies involving 1,099 participants, they found evidence that participating in work-group rituals can increase the meaningfulness employees attach to their work, which can in turn support organizational citizenship behaviors.
And when you think about it, the annual holiday party is a pretty interesting organizational ritual.
It happens every year.
People anticipate it.
They talk about it beforehand.
They talk about it afterward.
New employees discover “how we do things around here.”
Long-time employees compare it to previous years.
Stories from memorable parties can survive inside an organization for years.
So whether leadership intends it or not, the holiday party can become a small but highly visible expression of company culture.
That may help explain why an event lasting only a few hours can sometimes feel much more significant than the amount of time it actually occupies in the year.
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So… should you spend $1,000 per employee?
No.
And that would probably be the worst conclusion to draw from all of this research.
A $1,000-per-person party isn’t automatically ten times more engaging than a $100-per-person party.
A 15-person company could take its team to a great restaurant, have the owner personally recognize what people accomplished that year, add a few thoughtful touches and create an incredibly memorable experience.
Meanwhile, an extravagant event can completely miss the mark if it has little connection to the people attending it.
So perhaps the better question isn’t:
“How much should we spend?”
It’s:
“What do we want our people to feel when they leave?”
That changes the conversation.
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How do you increase the odds of getting it right?
There is no scientifically proven formula for the perfect holiday party.
But the research above, combined with some basic principles of good management, points us in a useful direction.
Know your people. A formal gala may be perfect for one organization and painful for another. Asking employees or even a small representative group what they would actually enjoy can be far more useful than guessing.
Make it feel like your company. A family-owned business with 20 employees, a 50-person tech company and a 2,000-person organization don’t need the same kind of celebration. Your event should feel consistent with your culture.
Think inclusion before extravagance. Dietary needs, alcohol and non-alcoholic options, accessibility, timing, activities, transportation, whether partners are invited seemingly small decisions can have a big impact on who actually feels included.
Don’t confuse spending with recognition. Recognition is also about what you say and how you say it. A sincere, specific acknowledgment of what the team accomplished can sometimes mean more than another expensive item added to the evening.
Manage expectations. If it has been a difficult year and the company intentionally chooses something simple, there’s nothing inherently wrong with that. A modest celebration that feels genuine can land far better than a heavily hyped event that underdelivers.
And finally:
Be careful with “wow” for the sake of “wow.”
The goal isn’t necessarily to impress people.
It’s to create a moment they genuinely want to experience together.
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The best holiday party may not be the most expensive one
A company holiday party doesn’t need to be extravagant to be memorable.
It needs to make sense for the people it’s meant for.
Because when employees head home at the end of the night, they probably won’t be calculating what the company spent per person.
They’ll leave with something much simpler:
“They thought about us.”
Or they won’t.
And that may be where the real return on investment of a company holiday party begins.
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Research cited
Zacher, H. (2023). The company Christmas party and employee happiness. Scientific Reports, 13, 337. A study of 359 employees examining organizational, individual and event characteristics associated with satisfaction, dissatisfaction and emotions surrounding company Christmas parties.
Kurtessis, J. N., Eisenberger, R., Ford, M. T., et al. (2017). Perceived Organizational Support: A Meta-Analytic Evaluation of Organizational Support Theory. Journal of Management, 43(6), 1854–1884. A meta-analysis drawing on 558 studies examining perceived organizational support.
Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O. L. H. & Ng, K. Y. (2001). Justice at the Millennium: A Meta-Analytic Review of 25 Years of Organizational Justice Research. Journal of Applied Psychology, 86(3), 425–445. A meta-analysis of 183 studies examining organizational justice and its relationships with workplace outcomes.
Kim, T., Sezer, O., Schroeder, J., Risen, J., Gino, F. & Norton, M. I. (2021). Work group rituals enhance the meaning of work. Organizational Behavior and Human Decision Processes, 165, 197–212. Five studies involving 1,099 participants examining work-group rituals, meaningfulness and organizational citizenship behaviors.
