22.6.2023
LABOUR
> Labour Law

Unlocking the Secrets of Employee Motivation: A Legal Guide to Reviewing and Updating Policies

Motivating employees is essential for any business to succeed. However, it can be a challenging task to keep employees engaged and motivated. In this three-part article series, we will explore the concept of "the carrot and the stick" and provide five options on how to effectively motivate employees. From recognizing their achievements to providing opportunities for growth and development, we will delve into the strategies that can help to create a positive work environment and boost employee engagement.

This is part three of the three-part series on Mastering Employee Management: Strategies for Motivating, Disciplining and Advocating for Employees.

Frequency of updates to salary system

The employee’s wage must be linked to the business strategy. Every employee should be made aware of what it is required of them and what they will be specifically rewarded for. The reward for a job well done should be re-evaluated and updated frequently so that it does not become stale and disincentivizes the employee.

The frequency of updating salary systems can vary depending on the company’s policies and the industry in which it operates. Some companies may choose to update their salary systems annually, while others may do so more frequently. It is important to note that frequent updates to salary systems can help to keep employees motivated and engaged, as they feel that their contributions are being recognized and rewarded. Additionally, regular updates can help to keep salaries competitive within the industry and attract top talent. The frequency of review and updates to the salary system will depend on the employer’s objectives and the specific industry. We often discuss with employers on what frequency the task of updating their salary system should be done in line with their specific wishes.

Profit-sharing and equity participation scheme

Profit-sharing and equity participation schemes are incentives that can be used to motivate employees and align their interests with those of the company. Profit-sharing plans typically involve distributing a portion of the company’s profits among employees, while equity participation schemes involve granting employees an ownership stake in the company. These schemes can be effective in fostering a sense of ownership and commitment among employees and can also be used to attract and retain top talent.

These schemes also provide a tax incentive since if the income from a cash scheme is paid after three years from the date of entitlement to the amount of profit, this income will be exempted from social security contributions and will not be included in the personal income tax base.

Creating a positive work environment in times of economic downturn

When employers take care of their employees during economic downturns or other difficult times, they demonstrate that the employer values and cares for their workforce. This can lead to increased employee morale, motivation, and engagement, which in turn can lead to increased employee retention.

Additionally, businesses have a responsibility to have a positive impact on society and they are increasingly looking for ways to assist their employees during difficult times and expect the same from their business partners.

If you are looking for tax-efficient options to help employees in times of economic downturn, including salary increases, increases in reimbursement of work-related expenses, performance pay, annual leave allowance, and other one-time payments or gifts, you can find an excellent summary available here.

Unlimited annual leave

Unlimited annual leave policies are a growing trend among employers as they provide employees with more flexibility and autonomy. With an unlimited annual leave policy, employees are free to take as much time off as they need, as long as they meet their job responsibilities and performance expectations. With unlimited annual leave, the employees feel that they are trusted by the employer and this motivates them to perform better.

Sounds good in theory – but in practice, a review of such policy should be done immediately if people start feeling guilty about taking annual leave and take less time off or even never take time off. Employees may feel that there is pressure on them not to do it.

We also often get questions on how many days of annual leave gets accrued for the next year, if the employee does not use up the annual leave and how many days would the employer have to pay out, if the employment relationship ends before the employee can use up all the accrued annual leave.

Time off – work-life balance

Work-life balance is an important aspect of employee well-being and can have a significant impact on employee engagement, productivity, and retention. Employers should provide employees with flexible working arrangements and time off options that allow them to manage their personal and professional responsibilities. This can include options such as flexible working hours, remote working, and paid time off.

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