Implement staff incentive schemes

The benefits of staff incentive schemes

Incentives - such as performance-related bonuses - can help boost staff performance. The rewards usually relate to the achievement of certain goals, either personal, team or organisational, or a combination of all of these.

Perks are benefits given in addition to salary as a means of increasing satisfaction at work.

Pay is often the most important staff motivator and incentives and perks must not be seen as a substitute for a good pay scheme. However, they are not always expensive for business and some are tax free. See the information on incentive schemes for individuals on the Acas website - Opens in a new window.

Benefits to the business

An effective system of incentives could help:

• persuade staff to join your business
• retain existing staff
• increase staff motivation, morale and loyalty
• boost productivity
• link individual and business performance
• focus employees on achieving targets
• build teamwork

Some incentives and perks may benefit your business indirectly, eg free health assessments may reduce absences.

Benefits to staff

Perks and incentives can form an attractive element of an employment package by:

• enhancing the quality of working life
• rewarding staff efforts
• adding value to the employment contract

What makes effective schemes?

Perks and incentives must be affordable, transparent and appropriate to your business and the jobs they link to. It is worth introducing them after consulting with staff or unions.

You should look at whether other incentives will increase staff motivation. For example, in a sales environment an employer may wish to offer extra pay or benefits when targets are achieved.

Perks and incentives work best alongside good pay schemes and working conditions. They can be most successful when implemented with other good management practices, such as performance management, appraisals and appropriate communication and training programmes.

Subjects covered in this guide

• Introduction
• The benefits of staff incentive schemes
• Incentive schemes and the options
• Perks and the options
• Setting up an incentive scheme for employees
• Ensuring the incentive scheme is successful
• Here's how a staff incentive scheme improved our business

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