Motivate with incentives
How benefits could boost your bottom line
Show me the money
Remuneration is about far more than an employee's basic pay package. Using incentives such as bonuses, commission payments, company cars, pensions and private healthcare schemes could all help to motivate your team and boost your business's productivity.
To use pay as an effective incentive, you need to decide what you want from each employee and reward them for reaching goals which will really benefit the business. These targets should be challenging - but not impossible to achieve.
Target your rewards carefully. One employee may simply want a higher salary, another a company pension, while a third person might prefer more non-essential training. Some companies take a 'salad bar' approach, allowing staff to pick and choose their own remuneration package. The advantage is that staff are rewarded in a way that suits them best - and being offered a choice can be motivating in itself. The downside is the time you have to invest ensuring that every package offers an equal reward for equal achievement.
Extra money is usually a key element in any package. Commission is commonly used to encourage sales people to sell more. In other areas, bonuses may be paid for one-off improvements in performance. If you want to link the interests of your staff and your business more closely and boost employees' long-term commitment, you might consider offering them shares in the business through an Inland Revenue-approved share or share-option scheme.
Smells like team spirit
Contributions to pensions, insurance or healthcare schemes send out positive signals that you care about your staff. And it's often much cheaper for companies to offer access to group schemes than it would be for employees to pay for cover themselves. Company cars are a favourite perk, despite tax implications for both employer and employee. Car allowances offer an alternative choice. Tax bills can be reduced by running 'greener' company cars, since carbon dioxide emission levels now determine tax paid for new and existing cars.
Offering staff discounts on your products or services can be another attractive benefit, as can subsidised meals. And paying for or subsidising company social events is a good way of rewarding hard work and can help team-building.
But remember that however you pay your employees, for many the greatest reward is non-financial - doing something worthwhile and being recognised for their contribution or being praised for good work are great motivators and foster team spirit.