If you're reading this article carefully, you'll notice some of the words are spelled slightly differently than you're used to, that's because we were lucky enough to have our Vice President in EMEA, Tom Castley, write this insightful post. Make sure you're following @XactlyEMEA and @castleyt on Twitter to stay up to date with all of the exciting things going on across the pond. Financial rewards and high pay grades have featured strongly in the UK news recently, with the Financial Conduct Authority (FCA) parking its plans to launch an inquiry into the link between bankers’ pay and their behaviour. It is no secret that the behaviour of the banking sector has caused just a few problems worldwide, and it’s been suggested that irresponsible pay and bonus schemes may have encouraged this. The media in the UK have also been discussing Fat Cat Tuesday; the day which it is estimated that the average FTSE 100 CEO will have earned more than the average annual salary! This pay gap is becoming more of an issue with the UK workforce. Recent research from CIPD has revealed that one in six employees find the size of the CEO pay-packet discouraging which is a growing concern when as a nation, the UK is trying to address the productivity problem! Disparities around bonuses can be particularly demotivational, especially in organisations that don’t offer bonus or incentive schemes for their non-executive employees. Recent Xactly research revealed that only 45% of people are on a fixed salary with no potential for a bonus. From our research and experience we know that financial incentives can be a powerful tool for encouraging workers – but it’s evident they aren’t being used effectively. To tackle these concerns, organisations need to get to the nitty gritty and find the core values and incentives that drive their workforce. From this they can develop incentive schemes that link to their employees’ own individual achievements and even behaviours. It is the same principle as awarding children gold stars for good behaviour. When they reach their quota, they get a prize, an approach that can equally be applied to the modern day workforce. Here are three key recommendations as to how to apply this in today’s business world:
- Build tailored plans for employees: Good commission plans and clarity of incentives serve to motivate positive sales behaviour that provides fairness in results for both the employees and their customers. Appropriate business applications provide employees an overview of their targets, outlining clearly where they stand in relation to making their bonuses.
- Give rewards when rewards are due: To be truly engaged, staff need to be rewarded accordingly for their performance. Bonuses, commission, and other financial rewards are some of the quickest motivational levers companies can move to motivate staff. If employees can see that there is a clear link between what they deliver and what they receive, pay can be a great motivator.
- Transparent bonuses are fair bonuses: If employees feel they are receiving a fair amount for their efforts, the high pay-packets from an executive level will not feel as disheartening. Plus by linking bonuses to responsible behaviours, schemes can avoid encouraging the reckless selling of the past in the banking sector. An intelligent, transparent scheme supports a business to better understand where their success will come from, and motivate employees to remain loyal and productive. After all, a happy workplace is a productive workplace!