anyspacedirect news

More emphasis on bonuses but harder to earn

14th July 2010
Recent research suggests companies around the World are putting greater emphasis on bonuses and other financial incentives in the post-recession climate. As competition for market share increases, businesses are looking for new and effective ways to increase employee productivity and improve the bottom line. A study by the Hay Group suggests bigger bonuses will be used extensively to deliver on this.

At the same time, companies are making bonuses harder for employees to earn, and subjecting work to scrutiny at the boardroom level. Two thirds of respondents in the study felt the boardroom would start becoming involved in decision-making related to variable pay in the near future, with a further 61% of respondents believing better alignment with business strategy to be a key driver of change into the future.

46% of respondents are increasing the proportion of variable pay relative to base salaries for employees. 28% have already done so and a further 18% plan to do so within two years. Corporate investment in incentive schemes is also rising. 35% are increasing funding, with 20% already having done so and 14% planning to do so within two years. 33% are also widening eligibility for bonuses amongst staff.

Businesses looking to increase productivity following recession may want to consider taking this lead and looking at overhauling bonuses provisions. With money tight in the unstable economic climate, motivating staff with the possibility of variable pay is a great way to both increase productivity and improve the employer-employee relationship.
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