Staff Performance: Reinvigorate Rewards And Incentive Schemes


Do you have a rewards and incentive scheme to reward superior staff performance? You should have such a scheme. If you have one, here’s a method that can boost even the most successful system.

The Perfection Bonus

The Perfection Bonus is exactly that: a bonus for perfect performance by employees. It should be available to all employees. It doesn’t need to be in cash. But it should have substantial value to employees.

Employees Not Managers

The Perfection Bonus rewards employees when they meet or exceed all team and individual performance standards. It is not a reward for profit in the business. Profit is a management responsibility.

Case Study 1: Trips To China

About 25 years ago I did lots of consulting work for one of Australia’s largest retail hardware chains. They had reward and incentive schemes for store managers. These were profit based. The schemes for store employees were sales based. Both schemes were very successful. The employees could win trips to China for themselves and their partners.

One day the Human Resources Director asked me to visit him. As I sat down he said, “We have a problem with our sales reward and incentive scheme. What can I do for employees who’ve already been to China twice?” Outstanding employees won trips to China for themselves and their partners. It was a hard reward to improve.

Case Study 2: Another Consequence of Success

This scheme involved factory workers on an assembly line operation. The scheme had been successful for both the company and the operators. They had managed to reduce operating costs by about 33%, and improve quality by over 25%. They also reduced operator numbers by 20%.

Rewards were based on both individual and team performance. In order to boost the overall reward, management consulted employees. All agreed that all future rewards should be team based. Employees would be better rewarded this way.

Unseen Consequence

For no apparent reason, small errors appeared in areas that had previously attracted individual incentives. These errors affected only about 20% of all operators. But they affected the value of the rewards and incentives of all operators.

It appeared that some operators interpreted the move to total team based rewards meant that work that had previously attracted individual rewards was now less important.

In both these examples, a Perfection Bonus could have been useful.

Ground Rules

You cannot introduce a Perfection Bonus unless your rewards/incentive system is already functioning well. It’s a bonus to reward “perfect” performance not just “good” performance. That’s the foundation.

You must have in place…

  • Measurable performance standards for each employee and team
  • Effective performance systems that enable employees to meet performance goals
  • Systems that enable employees to measure their own performance at least weekly and preferable daily
  • Specific special rewards for each employee who meets performance standards
  • System for regular review of the system by employees and a system for implementing and measuring employee initiated changes
  • An absolute emphasis on meeting performance standards: the rewards and incentives are the positive consequence of meeting the standards
  • A system that makes performance progress freely available.

In other words you need a successful and effective performance based rewards and incentives scheme in place before considering a Perfection Bonus.

What “Perfection”?

You reach performance “perfection” when every individual and team involved meets all set performance standards.

It’s not meant to replace rewards for reaching standards. It’s an incentive to encourage employees to reach all performance standards and a way of rewarding the achievement of that goal.

And it’s yet another way of keeping employees and managers focused on performance rather than behaviour.


Even the most successful reward and incentive schemes can lose their full power over time. The Perfection Bonus is a method of reinvigorating your system while maintaining and reinforcing the emphasis and importance of effective measured on job performance.

Source by Leon Noone