Implement staff incentive schemes

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

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's 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 manage 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.