Oil and gas business BP has announced that it will change its incentive programme for its employees.
The changes, which are part of the firm’s ‘fundamental reset’ that it announced in February, narrow the top incentive bracket and have been designed to drive a high-performance culture, as it delivers its new strategy. It added that they are not about reducing costs.
They will include establishing individual performance ratings where employees who are judged as exceptional will be paid a higher discretionary annual bonus, while bonuses for weaker performing staff will be cut.
Employees who are rated in the top 25% of the workforce could now achieve a 1.5 times bonus depending on their performance, while those rated in the bottom 10% will see their bonuses halved or cut entirely. For most employees, or around 65% of the workforce, bonus levels will remain the same or slightly less.
Evaluations will also be partially carried out against new scorecards that reflect the priorities of different areas of the organisation, with discretionary annual bonuses becoming more closely linked to the performance of employees’ own division.
According to the firm, the new programme is intended to encourage a high performance culture across every BP business. It will also include more frequent, and more structured, higher quality feedback conversations with line managers every quarter.
BP’s previous discretional annual bonus structure rewarded staff based on performance of the organisation as a whole, awarding higher bonuses to top performers.
A BP spokesperson said: “These changes in performance management are designed to create greater clarity and ownership of accountabilities and a more direct connection between delivery and reward. Every part of bp is in action to deliver the strategy and these changes will help ensure everyone in the company is aligned in the creation of long-term shareholder value.”
