Dec. 12, 2005--Swept up in the holiday spirit, or perhaps too much eggnog, small-business owners are saying thanks to their employees by spending more this year on office parties, holiday bonuses, and pay raises. According to a recent OPEN from American Express survey, 57% of business owners surveyed planned on giving a holiday party, and 54% plan to give end-of-the-year bonuses.

A separate poll by career-related publisher Vault predicts an even more festive holiday season. According to the firm's 2005 Company Holiday Party Survey, 67% of companies are celebrating with an office party this year, a 5% increase from last season. And what happens when employees break free from their cubicles? The survey found that 73% of companies plan to serve alcohol at their parties, and 38% of employees report having witnessed inter-office canoodling. Some 14% went so far as to describe their office parties as "wild and crazy."

"Bonuses and office parties are a reflection of the year past and are a sign that businesses have money on hand," said Barbara Weltman, an American Express small-business adviser. "Raises, on the other hand, are a good indication that companies expect the good times to continue." The American Express survey showed one third of business owners are planning to give raises, up from 26% in the fall of 2004 and 18% in 2003.

And while the numbers show more companies with more holiday cash on hand, there's no one standard formula for how they use it. Jason Crawforth, CEO of Treetop Technologies, a Boise, Idaho-based IT company, says employee bonuses will increase slightly this year, but he doesn't expect an over-the-top holiday party.

"My philosophy is to put as much money into the hands of my employees as possible, so I'd rather give a higher bonus than have an extravagant holiday party," he said. Making things slightly more difficult is the fact that Treetop Technologies has to hold two holiday parties -- one for the Boise office and one for the company's Canadian branch.

Employees of handbag wholesaler Mary Frances Accessories are already reminiscing about their holiday party -- because it was held months ago. "We wanted to try something really special and fun this year, so we held the holiday party in September," CEO Mary Frances Shaffer said. "Everyone has so many obligations during the holiday season, so we did it early this year so it didn't get watered down."

Shaffer said the company ties employee bonuses to the past year's performance as well as the budget for the holiday party. At least one indication that it was a good year for the Lafayette, Calif.-based company -- Mary Frances employees were chauffeured to the party in limousines.

Richard O'Donnell, president of Footbridge, a staffing firm based in Andover, Mass., typically treats his employees to a party and overnight stay at a resort for the holidays. Last year was spent at a resort on the coast of Maine. This year, however, Footbridge put the holiday party on hold and donated the money they would have spent to the Red Cross Hurricane Katrina Relief Fund.

"The holiday party is our way of giving thanks to our employees for all their hard work, so they are the ones who are actually sacrificing something," O'Donnell said. "We wanted to let the employees make the decision, and within minutes, everyone was in agreement -- they all thought it was a great idea."