Bonus and incentives - What is best practice?
The retention of your top employees is vital to your organisations long term success. Understanding how to motivate your employee’s through the use of bonus and incentive schemes could be the key to ensuring that your high achieving employees remain loyal and motivated while continuing to drive your company towards achieving its goals.
Bonus and incentive schemes can be structured in a variety of ways. It is important to acknowledge that no organisation is identical to another. Tailoring bonus / incentive schemes that ‘best fit’ your organisation is certainly the ‘best practise’ to undertake.
Before implementation, organisations need to consider several factors which will determine the most appropriate bonus / incentive scheme for their employees. The factors to consider include;
• The types and levels of employees in their organisation.
• The type of culture and specific behaviours that the organisation wishes to recognise and reward.
• Current employee expectations which have developed from existing incentive / benefit schemes.
• The associated costs to the organisation of managing and delivering the incentive / benefit scheme.
Once organisations have identified their unique characteristics, a variety of bonus / incentive schemes can be utilised to achieve particular outcomes from employees.
DISCRETIONARY / SEMI-DISCRETIONARY CASH BONUSES
• Motivates employees to achieve personal and team KPIs.
ADDITIONAL LEAVE BENEFITS
• Very easy to implement, least costly of all the incentive schemes and demonstrates a commitment to work-life balance.
SET REVENUE TARGETS (SALES BASED)
• Presents as a fair system which is equally achievable by all employees.
TEAM PROFIT POOL SHARE (CASH)
• Encourages teamwork and cooperation and is tied directly to company performance and individual performance (KPIs).
EMPLOYEE SHARE SCHEME
• Key employees align their financial interests with the company, encourages significantly better than average performance in the long term and it increases retention rates when tied to employment.
For more information on how Bonus / Incentive schemes can be utilised within your organisation, feel free to call us on (02) 8882 9694