Through our monthly Parameters survey of the paraplanning community, we asked you about the incentive schemes operating in your firms – do you have one, how do they work, do they help improve productivity, what’s the effect on morale, and are they successful in achieving their goals? Here are the results and your comments.
Does your firm use a formal incentive scheme to boost staff productivity?
All the firm’s staff are incentivised, including paraplanners 30%
Selected roles are incentivised, including paraplanners 10%
Only paraplanner team leaders are incentivised 0%
Incentives scheme is for advisers only 18%
No incentive scheme operated at our firm 38%
Other 4%
What forms do the incentives for paraplanners take?
Annual or quarterly bonus scheme 73%
Ongoing bonus scheme 15%
Ad hoc payments 7%
Non-monetary rewards 15%
Annual profit share 7%
Shares in the business 5%
Other 7%
Do you feel the incentive scheme used by your firm works well?
Yes 46%
No 17%
Unsure 37%
Nearly half of paraplanners said they felt the incentive scheme worked well, with bonuses paid after staff reviews acting as a good incentive, profit share “so staff share in the success of the business”, fully funded social activities when performance is good, and bonus scheme for exam passes, cited among the positives.
Where paraplannners were more critical of the schemes often was where management communication was lacking, with comments such as “It’s useful but it’s opaque in terms of qualifying criteria and how you can earn it/ who gets what and why.”
Other comments around flat bonus rates for all and fixed percentage of salary schemes which didn’t reflect individual performance, schemes which were based based only on value of new business, through to “the owner picks a figure out of the air” and schemes rewarding paraplanners for number of reports done “driving the wrong behaviours , e.g. doing a quick job rather than a good job, not willing to help out the team etc”, show where these schemes can go wrong.
Have you seen any negative sides to the incentive scheme?
Yes 37%
No 49%
Unsure 15%
Does this have a negative effect on:
Workload (particularly nearing incentive cut off points) 24%
The morale of other staff 47%
Creates a ‘them and us’ attitude 47%
Other negative consequences 12%
Do you believe incentives can be used to boost paraplanner productivity?
Yes 62%
No 12%
Unsure 26%
Schemes “done correctly and focusing on positive behaviours”, were seen to have the ability to increase productivity, as the high number of Yes responses indicates.
Comments included: “Whilst I always work hard and know I do a good job, sometimes recognition, even just an acknowledgement, helps so much to boost confidence and enthusiasm. So I feel any incentive would always be a good idea,” and “I think it’s nice to know that you will be recognised and rewarded for your personal hard work and effort in meeting the company’s goals and objectives.”
At certain times of year, such as end of tax year, incentives would be appreciated, it was suggested. But often it’s recognition of a job done well that matters, as one paraplanner put it: “Often we will be rewarded with a lunch or something tangible for the whole office and most people appreciate the acknowledgement, it’s not always about being financially rewarded.”
However, other respondents pointed out that the role of the paraplanner is to conduct research, analysis and construct reports which look to achieve the best outcome for clients and as such is hard to incentivise for productivity. This is especially so when paraplanners have limited or no control over which reports cross their desks and “one report can take an hour and another several days to complete.” Others felt incentivising on volume of reports done could lead to negative behaviours, where the focus was on volume rather than quality.
Do you believe incentives can boost productivity in a business in general?
Yes 77%
No 3%
Unsure 20%
Do you believe incentives boost morale in a business?
Yes 68%
No 6%
Unsure 26%
Would you prefer to see a fair pay structure that recognises each individual’s contribution to the business rather than an incentive scheme?
Yes 56%
No 10%
Unsure 33%
Around half of paraplanners said they would prefer a pay structure that recognised their value to the business than to be incentivised by a bonus or productivity reward scheme.
As on paraplanner said: “A fair pay structure would help justify the roles and responsibilities an individual has,” although it was pointed out that to operate a fair pay structure there would need to be targets or incremental steps which could increase salary, “to ensure once an increase is achieved the individual doesn’t lose their enthusiasm.”
Many respondents felt that a fair pay structure and incentive schemes were not mutually exclusive. “As one said: “I believe both are good, a fair pay structure with the addition of bonus and profit share,” echoed by another who said: “A fair pay structure is more important than incentives but I think incentives can also have a place alongside that, to encourage continued growth and development.”
Parameters is our monthly survey of the paraplanning community. All registered readers of the Professional Paraplanner daily email are sent an email once a month inviting them to take part. The surveys take around 5-8 minutes to complete. And every month we randomly select the name of one person who has completed the survey to win £50 in Amazon vouchers. Please keep an eye out for our mail and take part.
