As domain names are pretty cheap, especially if you purchase them in bulk, our administrators decided to give a small bonus this year to our staff in the form of a free domain name.

Have you ever done something like this and was it a positive experience?

We give our staff free hosting on the server. I never went out and purchased a domain for them but a few have their own sites and I've offered to host it now that I have a dedicated box. Its appreciated and they do a lot for the site and deserve it.

a free way could be to set up a apache vhost for said user, this being pretty trivial to do.
end result could be for example <username>.foobar.com/
as their homepage.
easy and its free.

I gave my users a domain as a reward for a contest. They where verry happy with it (and still are), so it's a cheap price for lot's of thanks.

We had thought about giving valued members/staff free domains but decided it was too much hassle. I mean, we'd have to buy it, our credit card details will be in the account, then we'd have to transfer it to the user who would have to have an account with a registrar somewhere............ too much hassle. We do give staff as much space and bandwidth as they require for their personal site(s) though (of course if they would start using tons of bandwidth then we wouldn't be happy bunnys but we've not had that problem) and most of them have their own domains anyway.

hence the hotness of the apache vhost, its free (provided you already have a domain), and gives a uniqueness to vhosts. granted, it will only work for web pages.

If I were rich I'd buy staff domain names but for now I just give them free e-mail addresses and free hosting space under my account (I'll give them a subdomain or something). Maybe once I start making some good money I'll buy them domain names.

I think I've donated a few domain names to a few staff members for some behind the scene-work.

Mods and admins at our site are given a subdomain of one of our domains if they ask for it, and an email.

eg.

http://foo.example.com
and
foo@example.com

If they have their own domain, we'll host that instead if they'd rather.

Depending on the staff, I would say a free domain would be a nice way to reward them, so long as they have hosting or you provide that as well (if able). Of course, when it comes to being free, you can't be too picky ;).

Free e-mail addresses at the specific domain they are staffing is pretty common, though I've heard of a few offering the same thing and hosting. If you can afford it and you have valued staff, I'd say it's a rather nice way to say "thanks".

the genre of my site and free domain names doesn't really work together very well.... i haven't given my staff much :)

A free domain would be nice. :) If I was rich enough, I would provide domains for the staff and for free, of course, requiring posts. ;)