Implement staff incentive schemes

Ensuring the staff incentive scheme is successful


Staff incentives and perks must be affordable, transparent and appropriate to your business and the jobs they link to. For example, in a sales environment an employer may wish to offer extra pay or benefits when sales targets are achieved.

It is also worth consulting with staff or unions before introducing incentives and perks to your workforce.

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

Establishing the staff incentive scheme

You can take measures when setting up a staff incentive scheme to help ensure its success. These include:

  • briefing the workforce on the incentive scheme and how it will work and benefit them
  • training supervisors to answer employee or trade union queries on the incentive scheme
  • documenting how the incentive scheme will work to avoid misunderstandings
  • running a pilot incentive scheme to see if any adjustments should be made before rolling it out fully

Is the staff incentive scheme working?

Establish a system that keeps a record of objectives and goals that you would like the staff incentive scheme to achieve. Remember that some incentives/perks can indirectly benefit the business and so it may be difficult to assess their impact.

Review the staff incentives and find out through feedback whether staff value them.

Your incentives should be open to all and must not discriminate against certain staff, eg membership of a men-only golf club. See prevent discrimination and value diversity.

Evaluating the staff incentive scheme

Set a time for evaluating the incentive scheme and involve staff or union representatives if appropriate.

Your evaluation process should aim to find out:

  • whether the staff incentive scheme is achieving its objectives
  • whether the staff incentive scheme is fair in terms of who benefits
  • whether incentives linked to performance really do motivate staff
  • how the incentive scheme is promoted and how well staff understand and buy into it
  • whether staff require further information or training to help them achieve their performance targets
  • how the incentive scheme compares with those of competitors or industry norms

Monitoring your staff incentive scheme or schemes is an ongoing process - problem areas should be highlighted and promptly addressed as they arise.