The firm says that the number of holiday parties always mirrors the economy's overall health. This year, 81 percent of businesses are holding holiday parties, and 37 percent say their party has been scaled back in same way. "This year we see how hard companies have been hit, especially in the financial and manufacturing industries where many companies have had to cancel parties altogether," said Battalia Winston CEO Dale Winston.

The survey also discussed gifts and bonuses:

• Of the companies that typically give year-end bonuses, 62 percent say that they will be the same or smaller than last year. Only 6 percent expect year-end bonuses to go up, and a few companies are getting rid of them.


• 60 percent of respondents said they won't be giving gifts this year.

Kelly Phillips Erb, who writes for the Legal Intelligencer, says that cash gifts and bonuses are often received with mixed feelings anyway. "Some employees are put off by the perceived lack of thought that goes into a cash gift, others are disappointed by the amount. Employees who received their cash gift or bonus in the form of a contribution to ordinary payroll were most disappointed." That's because the bonus or gift is considered compensation by the IRS, shrinking the gross amount significantly.

Mixed feelings or not, Hewitt Associates, a human resources consulting firm, reports that more than half of the organizations that are offering holiday bonuses this year will hand out cash.

"With so many companies struggling, employee morale is down across the board," said Hewitt's Ken Abosch. "Employers that can manage are paying out some type of holiday bonus this year in order to recognize and thank employees for their hard work."

You'd only have to go back to 2006 when Lloyd Blankfein, chief executive of Goldman Sachs, received a pay package that topped $50 million, The Wall Street Journal reported. CEO John Mack of Morgan Stanley got a bonus of more than $40 million that year. But this week, Mack announced a massive $2.3 billion loss for the fourth quarter. Goldman Sachs reported a $2.1 billion loss a day earlier. Both men gave up their bonuses this year.

Times have changed. Not only is the end of year a somber time for business, but next year's not looking too good either. Hewitt says that millions of U.S. workers will find their 2009 pay raises are less than 3 percent, the lowest average in the 32 years of Hewitt's survey, MarketWatch reported.