Christmas bonus? Don't fall foul of the remuneration changes
Incentivising staff through bonuses and other remuneration schemes is a common practice for many firms in the sector who want to encourage their staff to achieve their best possible performance. The benefits to such schemes are numerous; the chance to augment a standard income can promote productivity in individual staff and teams, increase motivation and focus staff on achieving business targets.
With Christmas just around the corner, many firms will be gearing up for the bonus season. However a firm's incentive scheme is organised, the Financial Conduct Authority's recent staff incentives, remuneration and performance management in consumer credit consultation provides a useful backdrop. The thematic review undertaken by the industry regulator discovered a number of practices it considers to be high-risk, and as a result, plans to publish a new Handbook rule and guidance in the new year.
Central to the FCA's findings was the discovery that a number of firms did not appear to be aware that their schemes presented any risk to the consumer, and consequently, did not have adequate systems and controls in place. Given that a 'significant proportion' of firms were found to be using high-risk schemes, the Christmas season offers a good opportunity to consider afresh any incentive or bonus schemes before the new rule comes into force.