Friends Provident is to introduce a bonus scheme based on employees’ individual performance, following feedback from staff and representation from trade union Amicus.
The financial services group hopes that the move will help to increase employees’ motivation by making them feel that they can have an influence over the level of bonus that they receive.
The company also offers an annual bonus based on corporate performance.
Pete Harris, reward and benefits manager, said that some employees had taken the corporate-linked scheme for granted. “We decided to introduce an element of the bonus that is [not] linked to our corporate performance. We wanted [to offer staff] a separate [strand] of the profit measure, which they perceived was actually having an influence over profit.”
Under the terms of the new scheme, which will run alongside the existing bonus arrangement, employees will be set personal objectives and targets that will be reviewed over the 12-month period.
Depending on their grade, staff will be set minimum, expected and maximum percentages of salary as possible bonus figures, at the start of each year.
The new individual-focused scheme is due to come into effect in March at the start of the next financial year.
Employees will receive the first bonuses paid out under the scheme in March 2008. These will be issued in the form of deferred shares and cash.
The company began to communicate the changes to employees last month by including details of the new scheme on the company intranet and holding briefings for managers.