Employers confident that bonuses help meet organisational goals

Over three-quarters of organisations operate a bonus scheme and almost two-thirds of employers feel their bonus schemes are either "very" or "quite" effective. That's according to a large-scale survey undertaken by the Work Foundation.

The 365-employer survey found that 38% of respondent organisations have schemes covering the entire workforce. Annual payments appear to be the norm for most employee groups and bonuses generally represent less than 10% of earnings.

Improving business performance, and linking the performance of employees directly to that of the business, are the most common reason for introducing a bonus scheme

What you will find in this report by the Work Foundation

This 62-page report looks at "best practice" in the management of bonus schemes. It is divided into four main parts:

1. A survey of 365 organisations covering:

prevalence of schemes
types of scheme operated
employee groups covered and numbers of schemes operated
reasons for introducing schemes
performance criteria used
proportion of earnings represented by bonus payments
frequency of payments
consolidation into base pay
changes made to bonus schemes
whether bonus schemes are effective

2. Case studies of six organisations:

B& Q
Barclays Group
Boots the Chemist
Companies House
LG Philips Display, Durham
Norwich Union Insurance

3. Extracts from management documents:

Store-team bonus, B& Q
"Your bonus briefing", Barclays Group
CH corporate bonus scheme, Companies House
Gainsharing scheme policy, LG Philips Display, Durham

4. Consultancy advice:

The Work Foundation's deputy director of research, Stephen Bevan, is interviewed about bonus schemes.

Want to know more?

Title: "Bonus schemes", Managing Best Practice no. 110, Work Foundation.

Methodology: Questionnaires were sent in April 2003 to 5,600 human resource specialists drawn from the Work Foundation database.

Sample size: The report draws on replies received from 365 organisations.

Availability: To subscribe to the monthly report Managing Best Practice, contact the Work Foundation on tel: 0870 165 6700.

Formerly the Industrial Society, the Work Foundation seeks to "improve the productivity and quality of working life in the UK, with a unique fusion of research, consultancy and advocacy". To find out more visit www.workfoundation.com

Posted 26 January 2004