Poorly-planned incentives 'can damage firms'

The Chartered Institute of Personnel Development's annual conference has heard bonus schemes for positions such as sales jobs can be set up in ways which harm their employers, a source reveals.

McDonald's benefits and compensation manager Neal Blackshire told the attendees a balance must be struck between short-term and long-term objectives, People Management reports.

Highlighting the need for schemes to emphasise stability in performance, he says the current banking crisis is the result of reward and bonus schemes focussing on the wrong behaviours.

Mr Blackshire uses McDonalds as an example, saying the restaurant chain identifies which incentives will work most effectively for its employees in sales jobs and offers the rewards most likely to appeal to them, the source asserts.

While the firm offers cash incentives, he states it also offers discounts on things such as driving lessons.

"The restaurants with more positive employees do better … it makes the key difference to the business," he tells the news provider.

In a recent survey published in Personnel Today, 85 per cent of those born in the 1980s believed cash incentives were the most effective means of motivating them.

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Filed: 29-09-2008