Reaping the benefits of bonus plans

Bonus schemes encourage staff to work hard and well. They can be dependent on company or departmental performance, or personal performance.

Bonus schemes encourage staff to work hard and well. They can be dependent on company or departmental performance, or personal performance.

IT headhunter Justin Gilbert of recruitment firm Tyzack said the more senior staff are, the bigger their bonuses in respect of their base salary. "IT directors should expect between 30% and 100%," he said.

At Allianz Cornhill, shortlisted in the banking and finance category of the Best Places to Work Awards, everyone in IT benefits from bonuses. Senior IT manager Mandy Tancock said, "Our bonus scheme has elements linked to company, divisional and individual performance. This paid between 4% and 35%of salary to the IT department last year,"

A scheme must be easily understood, said Gilbert. "In some companies it is for being on target with goals, in others it is for exceptional performance, so it is important staff understand the company's approach. A high base salary could earn a 30% bonus that is difficult to achieve, whereas a lower salary could come with a lower bonus that, because it is easier to achieve, means overall income is greater."

Sometimes small and frequent bonuses work well both as a continual incentive and as a valuable team-building tool.

Citigroup, also shortlisted in the banking and finance category, issues awards to employees in the form of cash, gifts and certificates. Technology infrastructure project manager Constantinos Zannetos said, "The scheme acknowledges employee contributions outside of the formal compensation and appraisal processes."

Telecoms company Thus, shortlisted in the utilities and communications category, has a similar scheme. "Employees who have shown outstanding commitment and performance are nominated by directors for a CEO award," said Lloyd Naylor, internet management centre manager. "Winners receive 1,000 of holiday vouchers and a certificate."

At Hillary's Blinds, shortlisted in the retail, wholesale and distribution category, there is a Team Player of the Month award. "Individuals are nominated by their peers for outstanding contribution to the team," said systems manager Paul McKeown. "Participation is high, with a great deal of pride amongst nominees. Winners receive a certificate and 30 of gift vouchers."

Whatever the incentives, it is vital not to dilute their value. Gilbert said, "Staff may 'expect' bonuses for par performance, rather than for above par or exceptional performance."

If that happens, the purpose of the incentive scheme is lost.

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