Employee incentives


One of the key considerations for a business is how to motivate, incentivise and ultimately keep valuable staff; this is something carefully considered employee benefits can assist with.

One of the key considerations for a business is how to motivate, incentivise and ultimately keep valuable staff.  The loss of important personnel can be devastating to a business and the disruption caused by staff members who are not motivated can be a time consuming drain on productivity. 

This has never been more important, particularly in Christchurch where there is a significant shortfall of skilled labour in certain industries.

The primary message to remember is that whilst salary or wages are a significant component to attracting and maintaining a good workforce, it is the additional factors and benefits provided by an employer which often tip the balance in being able to recruit and retain a stable, quality workforce.

A client recently came to us seeking to put in place a benefit scheme for their employees that would incentivise them and maintain a stable workforce as well as providing a more attractive offering for potential employees.
We worked closely with our client and considered various options.  There were many factors to consider such as cost, tax implications, perceived benefit to employees and overall value.  Our client decided to offer the following:

  1. A bonus payable upon performance measures being met;
  2. Insurance to cover personal risk such as medical and life;
  3. Extending, where appropriate, the use of company cars, mobile telephones and laptops (which are used primarily for work) for personal use outside of work.

We then set out the terms for each benefit to ensure that the obligations of the employer and the rights of the employees were specifically clear. 

For example, in relation to the bonus scheme, it is important that the employer retains some discretion as to the payment. This means that in certain circumstances, even if relevant key components have been met but the business could not sustain a payment, it could withhold that payment.

As you can imagine, such a policy has to be very clear and fully understood by all parties.

In the current environment it is important that employees are appropriately incentivised in order to maintain a productive and stable workforce.  Employers need to consider the benefits they provide and the value to their employees in addition to a decent salary/wage. 

There are many options to consider and many factors which may influence the decision an employer makes regarding employee benefits. 

Bonuses, insurance and other benefits such as cars and mobile telephones are particularly good options but it is important that employers have fully considered the implications of providing these benefits. Employers must ensure that they have specific terms and conditions (ideally set out in rules, schemes or policies) that govern how and when these benefits are awarded to employees and how the employees can benefit from them.
If you would like further advice around how to incentivise your employees or any other employment related matters, please contact our specialist Employment Team.

All Articles

Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.