Want to boost productivity? A financial bonus is one of the most reliable ways to do so, but new research has found nearly half of UK employees won’t be in line for one.
Incentive compensation business Xactly said over a quarter of 1,500 workers linked financial incentives to motivation at work, with better commission, bonuses and increasing pay cited as the best ways of increasing productivity.
Nearly 70 per cent said having received a bonus in the past fuelled them to “push towards their next professional goal” within nine months.
Many UK employers however, weren’t capitalising on utilising financial incentives to strengthen engagement among employees, with a quarter of employees saying their personal performance wasn’t at all linked to their pay package.
The study also found 45 per cent of workers were paid hourly or on a fixed pay rate with no potential for a bonus. Employees said the lack of financial incentives was creating a productivity lag.
Tom Castley, vice president at Xactly, said: “The UK is currently experiencing a huge productivity challenge – UK productivity currently falls behind the likes of the US, Italy, Germany and France.”
While the government was “taking steps to address this with the productivity plan” announced earlier this year, Castley feels “UK plc must play its part too”.
“This isn’t about throwing money at the problem – but smart, performance-based financial rewards must be used to help the UK pull itself out of the productivity pit,” he added.
The one-size-fits-all approach that many employers adopt, was, Castley said, an ineffective approach and should be ditched in favour of tailoring compensation schemes in order to encourage and maintain motivation among staff.
Getting the best out of employees didn’t all come down to money however – the report said 27 per cent of employees felt internal recognition was particularly rewarding and would motivate them to go the extra mile at work.
In July, George Osborne debuted his productivity plan, to set the agenda in attempting to overhaul the UK’s long-running productivity problem – lagging behind leading advanced economies. Matching the productivity of the US would raise GDP by 31 per cent, equating to around £21,000 per annum for every household in the UK, according to the government.
The plan included 15 areas “built around two pillars” – encouraging long-term investment and promoting a dynamic economy. Proposals included cutting corporation tax to 18 per cent by 2020, a new compulsory apprenticeship levy, ensuring super-fast broadband would be available to 95 per cent of UK households by 2017 and investing £6.9bn in the UK’s research infrastructure.
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