New research by Tenon Forum revealed that small businesses are lagging behind their larger rivals in awarding annual bonuses to staff.

According to the study  52% of SME businesses rewarded their staff amidst the high street gloom and tightened consumer spending of 2005.

While 70% of companies with more than 200 employees rewarded their staff with a bonus, only half of companies employing between five and 199 workers said they have.

Smaller firms have found it more difficult to recover from last year's economic woes. Of those who did pay bonuses, the study found that about one in five firms plan to give staff more this year than last.

Manufacturers proved to be the most generous, with 61% reporting plans to award bonuses. Nearly a fifth said they plan to increase the amount they pay out.

The transport and communications sectors, meanwhile, ranked the lowest, with only 35% saying they’ll be paying bonuses.