Implement staff incentive schemes

Here's how a staff incentive scheme improved our business

Founded in 1991, QPC Ltd provides solutions for some of the UK's largest customer contact centres. Following an acquisition in 2002, the company took the opportunity to review its staff incentive scheme. Financial controller Wendy Brady explains what was done.

What I did

Decide objectives

"We had a basic bonus scheme in place, but staff consultation revealed that employees rarely achieved the bonuses and had lost faith in the system. Departments were also starting to blame each other for failure to meet performance targets.

"We decided to start again from scratch, taking into account staff feedback and lessons learnt from the old scheme. The management team brainstormed ideas for a new incentive scheme to motivate staff, encourage teamwork and improve overall business performance."

Design a scheme

"The key to the new scheme was introducing quarterly, rather than annual, bonuses. This gave us flexibility to modify goals every three months, to fit the business' needs.

"We also changed the bonus award criteria. Before, the bonus was based on an annual financial target. The new scheme included a range of goals, including revenue targets, cash collection and a break-even target on profit.

"We also included a personal target for each employee, based on their job specification. The scheme was designed so that staff could get a percentage of the bonus, even if they didn't achieve every target in a quarter. Bonus guidelines were issued to all staff and managers talked to them so everyone knew how the scheme worked."

Evaluate and review

"We regularly review the scheme in consultation with staff and communicate progress. In the current financial year, we've exceeded both revenue and profit targets and reduced the number of debtor days.

"Staff feedback has been great too. We've been surprised at how much the scheme has boosted teamwork. Departments are now keen to co-operate and go that extra mile to get a job done, because they have common, achievable goals.

"The flexibility of quarterly target setting has also worked well. For example, we based one quarter's targets around the launch of a new product. Quarterly goals also help to maintain staff interest and are far more effective than a distant annual target."

What I'd do differently

Set more individual targets

"Corporate goals are important to keep everyone pulling in the same direction, but after reviewing the system we found staff wanted more personal objectives. We're now looking at including a number of specific project-oriented goals in our performance targets."

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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