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Fall in use of staff bonuses

In contrast to the widely reported bumper pay-outs in the City, the majority of employees across the UK are likely to be disappointed by their annual bonus, according to research conducted by Innecto, a specialist employee reward consultancy.

Among the 183 HR directors interviewed in the snapshot survey, Innecto found that 19% of human resource directors said their company definitely would not be awarding a bonus this year and 40% were still unsure. Only 41% of HR directors said their companies would be awarding staff bonuses.

Key survey results

18% of survey respondents expected bonuses to be higher than last year.
The vast majority -- more than two-thirds (68%) -- said they expected bonuses to be less than last year, while 15% said they would be the same.
The overall opinion was that the key factors affecting this reduction in bonuses were the general economy (22%) and the market in which their businesses operate (37%).
Only 8% blamed the downturn on a change in management approach and 6% the employees' own performance.

A final word

"When profits are down, linked bonuses are obviously cut -- but this usually creates a despondent workforce. With difficult times ahead, I would advise companies to concentrate on smart ways of keeping employees motivated. Investment in employee communication, clear career paths, constructive appraisals and positive feedback will all pay dividends when bonuses don’ t pay out." -- Deborah Rees, director of Innecto.

Want to know more?

Innecto Reward Consulting is a specialist consultancy advising businesses on their employee reward strategies. Formed in 2002, Innecto clients include Dixons Group, Marsh UK, Walt Disney, Channel 4, Vision Express and Aardman Animation. To find out more visit www.innectogroup.co.uk

Posted 13 January 2006