Implement staff incentive schemes

Set up a staff incentive scheme


Remember that pay and financial benefits are not the only things that may improve staff performance.

Other key motivators for employees include:

  • job security
  • job satisfaction
  • good working conditions
  • appropriate training

Setting up an incentive scheme: steps to take

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

  • Identify the incentive 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 help them achieve a business target. See work effectively with trade unions and employee engagement.
  • Relate the incentive 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.
  • Establish any tax implications for your staff. Consider related costs and funding. See expenses and benefits and special types of employee pay.
  • Ensure that the planned incentive scheme is competitive. Look at similar incentive schemes within other businesses.
  • Decide on performance measures for your staff. You might set targets for performance levels or work quality. See managing staff performance.
  • Run a pilot incentive scheme and evaluate results. See ensuring the staff incentive scheme is successful.
  • Regularly review your incentive scheme and obtain feedback from staff. Make sure that you document, communicate and obtain feedback from staff to gain an understanding of what works and what doesn't work. See encourage staff feedback and ideas.

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