So Much for the Office Holiday Party

Tara Goodwin Frier isn't throwing her employees the annual holiday party this year. Instead, she used the money she would have spent on holiday meals and staff gifts to hire back Amanda, the crackerjack junior employee she had to lay off this fall.

"No one felt like celebrating," said Goodwin Frier, CEO of The Goodwin Group, a small marketing firm outside Boston. "We would rather use the money to bring in Amanda one to two days a week so we can land the accounts necessary to bring her back full time."

Company Holiday PartiesPlay

For the decade-old firm, 2009 has meant lost clients, more tap dancing to sign new ones ("what used to take two meetings to close now takes four or five," Goodwin Frier said), delayed commission payments for staff and the sacrifice of Goodwin Frier's own paycheck during weeks with low cash flow.

"My staff has been good about the cutbacks, saying, 'We're all still here and we're still employed,'" the CEO explained.

In other words, holiday party, schmoliday party.

Not all businesses have spent the year as close to the edge as the Goodwin Group. Nevertheless, the canceled or greatly scaled-back holiday party has become a familiar recessionary tale: The rented hotel ballroom has been replaced by the company conference room. Five-star dining by pizza and beer. Year-end employee bonuses by $10 coffee gift cards.

VIDEO: Host a holiday party without breaking the bank. Play

In Praise of the Holiday Potluck

An annual survey conducted by executive search firm Battalia Winston Amrop found that 56 percent of leading U.S. businesses polled were either nixing the holiday shindig this year or dialing it back several notches. In 2008, that figure was 37 percent; in 2007, just 19 percent.

Of the companies Battalia Winston polled, only 67 percent planned to hold their holiday festivities offsite, down from 78 percent last year.

Columbus, Ohio, communications director Kristyn Wilson works at one such firm.

"This year we're going to have a company potluck," said Wilson, who in past Decembers has enjoyed a holiday steak dinner on the town. "For entertainment, we're pulling out the Wii for a mad Rock Band competition. It's more about coming together and less about spending money."

VIDEO: Joy Behar and Sherri Shepherd on The View.Play

Executive coach Suzanne Bates seconds this notion.

"The whole holiday party tradition needs an overhaul," said Bates, whose latest book is "Motivate Like a CEO: Communicate Your Strategic Vision and Inspire People to Act."

"It needs to fit the company culture and be appropriate for the economic times and the corporate budget."

Price tag aside, the beauty of low-rent holiday events is that they remove the artifice and forced merriment that plague so many swanky company parties, Bates said.

"People dread the traditional holiday party because it's a march through the routine: bring your spouse, grab a drink, sit down at a round table of 10 and talk with people you talk to all the time about business," she explained.

"It's just a continuation of the workday. What's fun about that?"

Posh Parties an Embarrassment?

"Justine," a human resources professional who didn't want her real name used, said she was "totally fine" with the casual, hour-long pizza party her employer held at the office this month.

"With the economy the way it is, I find it frivolous and irresponsible to spend thousands of dollars on a holiday party," said Justine, who works for a large government organization in a state with a multibillion-dollar deficit.

Unlike Justine, a project manager I'll call Nate had mixed feelings about attending his employer's holiday soiree this month.

"They've rented out an entire nightclub," said Nate, who works for a technology company in the San Francisco Bay Area. "Only problem is, they just laid off a couple dozen of my co-workers. I'm sure they already knew they'd be letting some people go when they booked the room. It's disgusting."

But there are valid reasons for the holiday show to go on, said Richard Coughlan, associate professor of management at the University of Richmond.

"Significant change can really leave people wondering where the company is going," he explained. "For some people, that party is a big highlight. If you cancel it, certain employees will want to know what the justification is, even if there have been layoffs. This is one of those instances where you really can't overcommunicate."

A Tradition of One's Own

Bates, the executive coach, agrees that holiday parties do have a loftier purpose than simply reminding staff they're appreciated and getting them good and drunk.

"This year is different than last year," she said. "Many companies have completed their reorganization and restructuring. What they really need to do now is build camaraderie and connections among the people who are going to move the company forward. They also need to celebrate their successes because a lot of companies have had near-death experiences."

Although his firm hasn't had to cut back any staff or pay, Guy Roadruck, managing partner of MediaPlant, a small digital media agency in Seattle, shares that sentiment.

"One reason we made it through the recession so far is that we don't throw money around on stupid stuff," said Roadruck, whose firm holds its annual holiday festivities at a local bowling alley and pool hall -- somewhere he said "better fits our company identity."

"There's nothing wrong or embarrassing about companies that prefer to do the big bash," Roadruck added. "Just don't be dropping huge dollars on a Christmas party, then start handing out pink slips in January."

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michelle Goodman is a freelance journalist and former cubicle dweller. She is the author of "My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire" and "The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube". For more information, see