Implement staff incentive schemes

Setting up an incentive scheme for employees

Remember that pay and financial benefits are not the only things that may improve staff performance. Other key motivators include job security, job satisfaction, good working conditions and appropriate training.

Steps to setting up an incentive scheme

An incentive scheme is perhaps the most straightforward way to motivate staff. If you are considering setting up one you should:

• Identify the scheme's objectives. For example, encouraging the recruitment or retention of staff, changing the organisational structure of the workplace or reducing any likely areas of conflict. Alternatively, you might want to encourage teamwork and motivation or to set specific targets for productivity, revenue or sales.
• Consult with staff and trade unions. This will help you identify where to aim the incentives, eg at your entire workforce, managers or a specific group of employees. It will help you find out what incentives your staff value most and what training they need to achieve the target.
• Relate the scheme to the business' remuneration system. Consider whether the incentive should be financial or non-financial. Think about how the proposed incentive will relate to other cash benefits and how much administration will be needed.
• Ensure that the planned scheme is competitive. Look at similar schemes within other businesses. Establish any tax implications for your staff and consider related costs and funding.
• Decide on performance measures for your staff. You might set targets for performance or work quality.
• Run a pilot scheme and evaluate results. See the page in this guide on ensuring the incentive scheme is successful.
• Regularly review your scheme and obtain feedback. Make sure that you document, communicate and obtain feedback from staff at all times.

You can also consider commercial providers of benefits packages who, for a fee, can manage the scheme for you.

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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