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This answer about how to reward/morale boost an employee who had worked a lot of unpaid overtime got me thinking.

Pull out a 100 dollar gift card you bought with your own funds.

That will be the best 100 dollars you ever invested. It will show that you notice and appreciate his work, you're rewarding it...

When is it appropriate that a business employee (including managers and executives) pay for things out of their own pocket?

There's plenty of times that employees to pay for things out of their own pocket, birthday, secret santa and leaving gifts come to mind, or when groups of colleagues go out for coffee and pay their own way.

On the otherhand - there are other times when the business should be footing the bill, for example a mandatory team lunch; or that it's a good business move to foot the bill, for example non-mandatory Friday night drinks.

And there are scenarios where I imagine it might be downright inappropriate for an employee to be paying for something for other employees - eg if a manager was paying one of their employees an extra $200 a week out of their own pocket, it might raise eyebrows.

But am I wrong in thinking this? When is and isn't it appropriate for employees to be paying for expenses or gifts for each other?

And specifically - is it appropriate for managers to give performance or 'thank you for a job well done' gifts to employees? What would the limits be around this?

  • (Company) expenses are one thing. Personal expenses another... and gifts are yet another, completely different thing... mind narrowing it down a bit please? This would also depend on the frequency of such events... – DarkCygnus Jan 16 at 0:27
  • Each company should have guidelines on what is and isn't appropriate as gifts and policies on what expenses could be reimbursed by the company including team lunches, tuition, conference fees, etc. – jcmack Jan 16 at 0:29
  • It's my belief that the statement is a false premise. If my manager pulls a gift card or even cash out of their wallet, and tells me it's from their own pocket, I'm still going to assume they'll expense it later to the company. I feel like any gift given in a workplace context, for workplace reasons like performance (as in the original answer), will be charged to the workplace. It makes the appropriateness of the gesture irrelevant, if it's never seen as a genuine gesture. – Xono Jan 17 at 1:24
  • @Xono - The answer in question specifically advises paying out of your own pocket. – dwjohnston Jan 18 at 4:32
  • I'm a IT lead. I like to make people on my workplace happy. I spend around a hundred bucks out of my pocket every last friday of the month in random candy and put it in a large bowl on the employees' mess hall. They absolutely love it. – T. Sar Jan 18 at 10:41
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It depends a lot on circumstances and it's mostly a personal decision.

I used to take my team out to lunch once a month (on company dime). It wasn't fancy but great bonding time and everyone had fun and was looking forward to it. Then the company ran into financial problems and tightened up all expense accounts, so I would have had to cancel the lunch. I decided to keep it going and just pay it out of my own pocket.

I have no idea whether this is "appropriate", it just felt like the right thing to do and it was entirely voluntary on my part.

Business expenses are paid by the company and personal expenses are paid by the employee. However, there is a bit of a grey area in between where it's up to personal judgement.

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When is an isn't it appropriate for employees to be paying for expenses or gifts for each other?

This, as we can see, is somehow of a gray area, and also depends on the specific Company and their policies... but.

  • If we are talking about company expenses then the employee should not be paying for it. If they do, for any reason, then it should be payed back to them at the end of the month.

  • If we are talking about personal expenses then the employee should be taking care of it. This makes sense because if it is personal there should be no reason why the company should pay that for you.

  • If we are talking about gifts then that also should be payed by the employee. Nobody is forcing you to give a gift to someone, thus the company should have no reason why to pay that for you.

But, again, this depends on each company and each person. There may be someone out there that likes to pay for everything, including company expenses... but that is completely up to their discretion.

  • I think this answer does a good job of answering the general question. I have updated my question to ask a specific question. – dwjohnston Jan 16 at 0:51
  • For gifts, if they are being given to a group as recognition for something accomplished for the company (eg 5 years without a lost time injury) then they should be paid by the employer. – Myles Jan 16 at 18:05
  • @Myles in that case that would fall into the "company expenses" category, and yes, should be covered by employer – DarkCygnus Jan 16 at 18:11
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When is it appropriate for an employee to pay for something out of their own pocket?

When it is a private expense.

If it is work related you should avoid paying unless it is circumstantially unavoidable and if you have a written promise if reimbursement.

Also, don't pay work related expenses that are higher than an amount that you could afford to lose.
A weeks pay, maybe two if you're feeling lucky?

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Paying for things you would otherwise not because of company business means paying with company money. Common examples include lodging, transportation and meals on trips, equipment and services as approved etc.

If you are paying for things out of pocket that solely help the company conduct business something is likely wrong. For instance, the example you included about paying employee out of pocket weekly is basically a raise that allows the business to retain the said employee. Which is just business benefit.

On the other hand, something like an appropriate gift is a mostly personal gesture. It doesn't really help the company conduct business, just makes the employee happy and feel appreciated by the gifter. Sure, it will boost their morale which might translate to improved output but that's not company business. So that would be personal money in most cases.

  • What makes the employee happy makes the company happy. – Mawg Jan 16 at 8:09
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    @Mawg True, but it can be a much more powerful statement when it is done on a personal basis rather than on a company basis. – Eric Jan 16 at 18:44
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    @Mawg For example, let's say you're invited to a celebratory lunch with the president, but the president has shut the catering department down. Would you feel more special if the president reopened the catering department to cater the lunch or if he personally bought you a cheeseburger? – Eric Jan 16 at 18:51
  • Interesting question - how would I feel if a self described billionaire bought me a cheeseburger? I'll take the fifth (as seems to be the fashion) – Mawg Jan 17 at 7:34
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When I have been a manger, I have usually had authority to pay up to a certain amount of company money (as project expenses) with no questions asked.

I generally used it to buy technical books for the team, or pizzas for weekend work, end of project parties & the like. This sounds like it would fit in there.

(Having said that, this wasn't always the case, so sometimes I dug into my own pocket for the same things. I paid - and the company benefitted (admittedly, the whole team, including me, also benefitted)).

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