Heating and plumbing company Wolseley has introduced a performance-related profit-share scheme that will pay out up to £4.5 million in bonuses to compensate in low salary increases.
The scheme is available to 80% of the organisation’s 7,000 UK staff. The other 20%, including branch and sales managers, already have access to 30 bonus schemes, some of which are linked to performance. Wolseley wanted to offer a performance-related bonus for all staff that did not have access to a bonus scheme.
In addition, the firm’s annual pay review in August saw a low-inflation salary increase across the board.
Neil McCawley, reward and benefits manager, said: “Some employees already get an opportunity to share through their bonus scheme, but 80% of our staff do not. It links into our pay review. Inflation is quite high and times are tight, so how can we reward our employees when we cannot afford to give them more in terms of pay?”
The scheme, branded Sharing Success, will make a cash payment based on the profits of each part of the business. For example, if a branch exceeds its target, its staff will get a share of the extra profit.
The payments will be made to staff in November 2012, with a total cap of £4.5 million. McCawley said: “It will depend how well the business does but, at the end of July next year, we will take a look at each of those parts of the business to see how well they have done against target. As long as everyone has achieved above target, everyone will get a payment.”
Once the first profit-share scheme has paid out for 2011/12, Wolseley plans to continue to offer the incentive every year.
Hear Neil McCawley speak in the pay and reward stream on 28 September at Employee Benefits Live 2011
Read more about pay and bonus schemes