The bullet point guide to setting up a staff incentive scheme

Guide to staff incentive schemesIt’s important to start out on the right foot when setting up your staff incentive scheme, so here’s a bullet point guide of what to consider before you embark on your journey.

In order to ensure that your scheme is a success, have you considered the following…



  • Start with your overall business objectives and align your incentive scheme objectives with them. It’s important that you know what you want your new scheme to achieve.
  • Typical incentive scheme objectives might include:
  1. Improving product profit margins
  2. Increasing turnover
  3. Increasing sales of a particular product
  4. Reducing customer complaints
  5. Improving customer feedback
  6. Developing behaviour in line with the corporate values and culture
  7. Improving employee skills



  • You will need to allocate a realistic budget. This will need to cover the cost of the incentive scheme itself as well as some additional costs, which may include:
  1. Promotional materials for the incentive scheme such as posters, leaflets, letters, etc.
  2. Scheme administration costs
  3. A proportion of staff time allocated to overseeing the scheme
  4. Rewards, including postage/delivery of rewards
  5. Tax and NICs



  • Audience turned offIt’s important you understand your employees and the type of rewards that will motivate them to achieve the targets you set.
  • Before you set up the scheme survey your employees to find out what rewards will incentivise them.
  • You can conduct research through:
  1. Questionnaires – online or paper versions
  2. Town Hall meetings
  3. Team meetings
  • Although the surveys should be anonymous, remember to ask for demographic information so you can determine if groups of employees prefer certain types of rewards.



  • It’s important that the targets and performance measures that are set are clear and obtainable.
  • Keep the targets and performance measures SMART:
  1. Specific
  2. Measurable
  3. Achievable
  4. Realistic
  5. Timed/Timeframe
  • Set targets and performance measures that related to your staff incentive scheme and business objectives.
  • Don’t change the targets and performance measures once they have been set and the scheme is launched.
  • If targets do need changing add an additional incentive or have an annual re-assessment to tie in with your financial year end.



  • Choose a clear start date, and if necessary, an end date.
  • Alternatively allow your scheme to run in line with your financial year.
  • Choose your timescales based on your objectives:
  1. Are you having a seasonal push on a specific product range?
  2. If changing behaviours then longer timescales will be needed



  • Select rewards that are appropriate to your employees’ demographics, interests and role within the organisation.
  • Offer a range of rewards so that you cater for the differing tastes of your employees.
  • Popular rewards include:
  1. Gift vouchers or gift cards
  2. Gadgets and electrical items
  3. Travel
  4. Activities people wouldn’t normally do
  5. Experience days



  • TaDaUse the expertise of your marketing team to help you plan a high profile launch.
  • Run launch events that your employees can attend during the working day.
  • At the launch event have people on hand to answer employees’ questions and have some of the rewards available on display.
  • Send out communications announcing the launch.
  • Make the launch day a ‘big deal’.



  • Once the scheme is launched it’s crucial to keep the momentum going by ensuring on-going communication with your employees.
  • Updates could include:
  1. Who’s been rewarded and why
  2. Case studies
  3. Changes to the scheme, such as additional rewards



  • Don’t forget to measure and report on how your staff incentive scheme is working.
  • You should report based on the scheme and business objectives.
  • Include employee feedback in your reports.
  • Check what has worked well and what hasn’t and then adjust your incentive as necessary.


Sales incentives



John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.

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