CASE STUDY – Reviewing a bonus scheme

Bonus schemes have long been the recognised way of incentivising staff to focus on and deliver strategic objectives. However, in the past few years, organisations have sometimes found them difficult to maintain in a cost-conscious climate. This case study considers how RRM Ltd helped the client decide whether a bonus scheme would be relevant to their organisation and if so, what type of scheme would be most appropriate for them.

The issue

Following a recent staff survey the client had been approached by their staff council with a proposal to implement a bonus scheme. The CEO was keen to ensure that the matter was given proper consideration and asked the HR Director to source a review of bonus schemes and what might work for them.

What did RRM Ltd do?

We worked with the HR Director to identify the concerns of the business and discussed the issues that staff council were seeking to address.

Key steps included:

  • Meeting with the senior management team to identify their thoughts on bonuses, and what they liked and did not like about the different types of bonus schemes
  • Discussions with the HR Director regarding operational practices already in place to support implementation of a scheme
  • Meeting with staff council to understand what the staff were expecting from a bonus scheme
  • Researching and benchmarking practice within the client sector and developing a report to summarise:

– General practice with regards to types of bonus scheme (ie. team vs individual, annual vs periodic, cash vs other rewards) Market practice in the sector with regards to levels and frequency of payment

– An assessment of the bonus schemes and how they work for/against the organisation

– Further discussions with management team to identify their preferred options

– Costing of the options and likely payments to staff Advice on the implementation process.

What were the outcomes

The client was able to make a recommendation to board regarding the likely outcomes and implications if they implemented either of the selected options.

Board decided to establish a trial within one directorate to identify whether the bonus scheme achieved the desired effect. They held open the option to withdraw or implement the scheme once the outcomes had been assessed.

Staff Council could see that their proposal had been taken seriously and appreciated that the company was serious about taking action on feedback from the staff survey.