Many organisations invest a great deal of time and money in designing incentive schemes that are failing to achieve their objective of retaining employees. According to Watson Wyatt’s European Total Reward Survey 2005, just 38% of employees say that they are motivated by the incentives and performance management systems offered by their organisations.
Bonus levels, however, were found to have a positive impact on staff motivation. Half the employees who receive a bonus payment of more than 25% of their salary said that they were motivated, compared with just over 30% who didn’t receive a bonus. Employers, however, rated short-term incentives as the third most important element of reward. But with 70% planning to review their incentive plans over the next three years, it appears many are aware that their current plan may not be the most appropriate for staff.
The research also found 40% of employees in the UK are actively considering leaving their job in the next year. Employee commitment was shown to increase when they perceived flexible benefits, empowerment, training, pay, employer communication and career development prospects to be good.
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