Bonus schemes fail to deliver improved productivity

Company bonus schemes do not motivate employees or improve performance, despite being a sought-after incentive, according to a recent survey of HR professionals.

More than 60% of the 183 HR professionals questioned by Reward specialist Innecto People said their bonus scheme failed to help improve workplace performance, despite bonuses coming top of the list of motivational incentives.

Seven out of 10 said their organisation had awarded staff bonuses in the past that were not justified, either because of pressure from the board or employees, or to appear successful to the outside world.

But most HR directors (82%) admitted they had no system in place to measure or evaluate how effective bonuses were.

Less than 20% of those questioned said they had carried out studies to gauge the effectiveness of their bonus scheme.

Deborah Rees, director of Innecto, said: “It amazes me that UK plc is throwing away billions of pounds each year on bonus schemes without certain knowledge that they are a wise investment.

“Bonuses can be an excellent way of motivating staff, but only when clearly linked to performance and communicated properly. Such poor investments would not be accepted in other business areas and so they shouldn’t be accepted in the area of employee reward.”

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