Making the most out of your employee reward program

Workplace reward programs are becoming increasingly common. They generally come in two forms:

  • Bonus structures that act as incentives.
  • Ad hoc rewards such as Christmas lunches, movie vouchers, time off in lieu, and so on.

At the executive level, we’re talking about bonus structures. While there are benefits to these schemes – employees can earn extra income where they may not have access to overtime or a pay increase – there are also risks.

Why have a reward program?

There are two main reasons why employers have reward programs:

  • To recognise, reward and motivate employees.
  • To attract or retain good executives without overcommitting themselves financially.

Consider this: an employer says, “We’ll put you on a salary of $100k with a base salary of $60k and access to a $40k bonus.” The employee has the potential to earn the full $100k but may only take home three-fifths. $40k is tied up in a reward program, with all the rules and risks that come with that.

How to make the most of workplace reward programs

The best time to negotiate rewards is when you’re starting a new role, or when you get promoted. Make the most of the program by reducing the wiggle room with certainty and clarity.

  • Ask your employer if they have a reward program and if you’re eligible to participate. More often than not, these programs are discretionary. If your employer does have one and you are eligible, ask for a copy of the program or any policy or bonus plan.
  • Get legal advice on your contract and any reward program before you sign. A lawyer can assist you during contract negotiations to try to maximise your chances of obtaining a bonus.
  • Work with your employer to set clear criteria. Sales targets might be crystal clear, but other targets may be less quantifiable; for example, boosting staff morale. A good scheme will have a balance of objective and non-objective criteria.
  • Once you’ve clarified your KPIs, determine how they’ll be assessed. Ask for reviews throughout the year rather than waiting for an end-of-year assessment. This way, you can get a sense of how you’re going and whether you’re on track.

Criteria that you can influence

It is preferable for your targets to be inside your influence. The point of a reward program is to encourage you to contribute to the success of the organisation.

I’ve seen reward programs that require an employee to clear four hurdles before they’re rewarded: an individual target, a team target, a department target and a firm-wide target. Even then the employer has had absolute discretion as to whether the bonus is paid.

In situations like this you need to be aware that the chances of you achieving your bonus may be limited.

What if you believe your employer is being unfair?

Don’t assume you have the right to a bonus. Read the rules of your reward program in your workplace policies and/or contract of employment. If you believe you’ve been denied a reward, you should seek legal advice.

It’s difficult to challenge employers on discretion.  However, if you have been denied your bonus because of an unlawful reason, for example, because you are on maternity leave or have complained, you may have options.

In rare circumstances, a company may have policies that include a mechanism for appeal or review. Under some contracts of employment, employees can lodge a grievance or a dispute notification.

A lawyer can help you make a judgement call on what’s best for you and your career.

Make the most of your workplace reward program with certainty and clarity: set targets that you’re in the position to influence and know the terms of their assessment.

TOPIC: Employment law
RELATED LEGAL SERVICES: Employment law

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Emma Starkey

Maurice Blackburn Melbourne
Emma Starkey is a Senior Associate in Maurice Blackburn's Melbourne employment team. She is a senior member of the only first tier law practice listed by the prestigious Doyles Guide 2017 for employee representation. Emma has successfully: obtained a 7-figure compensation package for a Chief Operating Officer who was sacked after she made a complaint about unethical behaviour represented a senior manager in defending a year-long witch hunt investigation which resulted in the manager being exonerated and reinstated to his position negotiated a 6-figure exit package for a senior manager who was subjected to bullying in his workplace assisted a General Manager obtain the equivalent of 9 months’ salary when her employment was terminated after more than 20 years of service assisted victims of sexual harassment and discrimination make complaints to their employer and to State and Federal human rights commissions obtained, in multiple cases, between 6 and 9 months’ salary as compensation for victims who were unable to return to work after botched workplace investigations assisted a suspended health professional defend allegations of serious misconduct and be reinstated to her position represented a senior executive in a multinational corporation defend allegations of bullying and maintain his employment without any adverse consequences or findings stopped an employer’s attempts to enforce an unreasonable and excessive restraint of trade clause which would have prevented the executive from working in their field of expertise, and assisted numerous women who have been sacked or demoted while pregnant, on parental leave or shortly upon their return to work. Emma understands that the decision to seek legal advice is not one made lightly. She is acutely aware of the reputational and financial concerns that executives have; in particular, their reluctance to engage in protracted and public legal proceedings. Emma’s proven approach combines legal and strategic methods to maximise the position of her clients and achieve their desired objective. The majority of Emma’s matters resolve through confidential negotiations and/or prior to trial. When litigation is necessary and recommended, Emma is experienced in litigating matters in the Federal Court, Court of Appeal, County Court, the Victorian Civil and Administrative Tribunal and the Fair Work Commission. She has successfully obtained interlocutory injunctions in the Federal Court and regularly represents her clients in mediations and conciliation conferences. Emma’s clients include CEOs, Managing Directors, General Managers, lawyers, professionals in the marketing, finance and IT industries, accountants, engineers, scientists, senior public servants, academics, health and medical professionals. Emma’s clients have repeatedly commended her for her strategic thinking, empathy, insight and determination. Emma has worked in the area of employment law for nearly 10 years. She has a diverse employment background, with experience working for another national plaintiff law firm, a government department and as a research associate to the head of an industrial tribunal.   Memberships & associations Law Institute of Victoria member Law Institute of Victoria Employment and Industrial Law co-chair Victorian Women's Lawyers member Maurice Blackburn's Women's Network member ...

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