N Brown Group has launched a profit-share scheme for 2,200 employees who are not eligible for its management bonus plan.
The mail-order retailer introduced the scheme following an employee survey in March this year, which indicated that staff did not feel they were being rewarded fairly for the contribution they made to the business.
Miranda Rosenbaum, reward manager, said: “One of the top concerns that came out was around pay and reward, and employees being recognised accordingly in terms of their contribution to the success of the business. We didn’t want to just ignore that.
“We have been delivering double-digit profits year-on-year and managers have been rewarded through the management bonus scheme, but we haven’t been able to share that with all employees before now.”
Rosenbaum said the company considered several options, such as awarding employees vouchers or giving them money to spend through its voluntary benefits scheme, before deciding to launch a profit-share arrangement.
Employees will receive a bonus worth 10% of their pre-tax salary for the month the payment is made if the company achieves its full-year profit target. If it fails to do so, the payment will be based on a sliding scale, so, for example, staff will receive a bonus worth 5% of salary if 50% of the profit target is reached.
Rosenbaum said a flat-rate payment for all employees was considered initially, but was deemed to be unfair. “We decided to make it more equitable and scale it according to employees’ salary,” she said. “We hope that [the amount] isn’t deemed nominal as we believe it is an excellent way to thank staff.”
Employees are due to receive their first payment under the scheme in May next year, after the firm’s annual pay reviews in April. Rosenbaum said the amount staff received would be based on any increased salary.
The scheme was launched to employees after the group announced its bi-annual results in October.