Companies that focus on rewarding top performers more than other staff
produce 17 per cent higher returns for shareholders, according to research by
consultants Watson Wyatt.
The Watson Wyatt Strategic Reward Survey found that companies which
customise their reward programmes to motivate top performing employees produced
average five-year shareholder returns of 74 per cent. Those that did not
produced an average return of just 57 per cent.
"Motivating best performers with better rewards really does work,"
said Tony Gilbert, a partner at Watson Wyatt. "Many employers
instinctively know this, but our research shows how large the effect may be. A
well-structured reward programme is a source of competitive advantage."
The survey of more than 170 leading companies across Europe found higher
performing companies were most likely to consider employee rewards as a means
to improve performance.