A flexible and creative rewards system can keep the team motivated and contribute to profitability. Best Places to Work winners outline their successful strategies
For many companies incentive schemes are a win-win way of motivating and rewarding staff. At online betting company Betfair incentivising staff is a key element of being an attractive place to work.
"We offer both financial and tangible incentives, as well as more intangible ones, such as providing a good working environment," said David Yu, chief technology officer and chief operating officer at Betfair, winner of the Best Places to Work Award in the media, hospitality, entertainment and leisure category.
One tangible incentive is the uptime bonus. "If the website is down we are not generating revenue," said Yu. "So at the end of every month we factor out any planned maintenance, and if there was no unplanned downtime the IT team responsible for site availability gets a bonus."
However, Yu said it is part of the scheme that the bonus should not be spent on household bills or mortgage repayments. "They have to prove they have spent it on a luxury," he said. "Some have bought iPods, or taken their partners out for a meal, or gone to a sporting event. One engineer donated his bonus to the tsunami appeal, which was wonderful."
The reasoning behind this is that the bonus will be associated with a particular item or memory, so the bonus has a lasting value.
This year Yu is upping the ante. "Now the site does not just have to be 100% available all month, but 99.9% of bets have to go through in under a second," he said. "Considering we take about three million bets a day, that is a very large number of transactions to process. Betfair is a technically challenging environment, and this has really focused the team's attention and galvanised them.
"For everyone else in IT, we are looking at how we can structure incentives by aligning engineers with their commercial counterparts, by reorganising around product verticals so the software developers, analysts and testers, as well as the marketing staff, have a common incentive."
This also means both technical and commercial staff have a better understanding of how both contribute to Betfair's profitability. "The commercial team see the importance of site availability, performance and technical infrastructure, and the engineers see the importance of customer acquisition and retention," said Yu.
Another tangible incentive offered to the whole company are the Sharp Minds awards. "We started them last year," said Yu. "All directors have a chequebook with which they can issue on-the-spot recognition for something exceptional. For example, the IT infrastructure director saved the company hundreds of thousands of pounds by striking good deals, and one of our engineers helped a top customer with their laptop, at a casino at midnight. Another engineer developed a version of the site to run on PDAs and mobile phones, in his own time."
As well as recognising this level of commitment to the company at salary reviews, the Sharp Minds awards give both instant and very visible reward for such efforts. Like the uptime bonuses, they have to be spent on a luxury.
"But they are not just an on-the-spot reward; they are also a raffle ticket," said Yu. "At the Christmas party, the chief executive picks some for a grand prize. Last year, 10 of the 30 Smart Minds winners were flown, with their partners, first class to Sun City in South Africa, staying in a luxury hotel, with a safari, a balloon flight and a gala dinner."
Betfair is closely associated with a wide range of sports, so staff have plenty of opportunities to go to sporting events. As well as a clear perk, such outings also allow teams to bond.
As a private company, with public flotation as a potential event, share ownership is yet another tangible incentive that Betfair offers. More than 80% of its employees own shares either through a save as you earn scheme or share options.
But as well as the tangible razzmatazz of high-profile incentives Betfair operates at a more personal level, which can be even more important to the individuals concerned. "For example, we have an engineer whose mother, who lives in Greece, is ill. The engineer felt she ought to resign to go and nurse her, but instead we have arranged for her to work remotely from Greece until her mother is better."
Of the incentives Betfair offers its staff, the most important, believes Yu, is the working environment. "We are very hard working, very technically challenging: we do more trades than the London Stock Exchange, can take 1,000 bets a second and serve 100 million page impressions a day. But we are very relaxed: engineers can work from home and have flexible hours. People like working here and with each other."
Tips for effective incentive schemes
- An incentive scheme should recognise exceptional performance
- If bonuses become "automatic" they cease to incentivise staff
- Team-based bonuses can be a strong team-building "glue"
- Linking rewards to mixed IT and business teams can demonstrate the crucial interdependence of both sets of staff to company success
- If smaller bonuses are spent on luxury items the reason for earning them will be better remembered
- General bonuses can cause dissent if rewarded employees are felt to have underperformed, but individual bonuses can cause jealousy and resentment: fairness is crucial