Build It

Employee Incentives and Rentention Strategies

Creating an entirely committed and motivated SME organisation doesn’t have to involve large expenditure, complex communications plans or a heavy up-front investment of cash.

In his book, Build It, Craig West shows how you can get your employees thinking like business owners. With invaluable information on what to avoid and what to consider in the private SME environment, this book guides you through the minefield of long-term incentive plans to help you find the appropriate solution for your business.

In today’s competitive environment, can you afford not to invest in your employees?

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“Employee ownership is world changing… It reflects that human capital is becoming more important than physical assets. A company is more and more defined by its skills. It relies more on its creative energies. I am here to celebrate a great achievement of employee ownership. The global economy will succeed when employees feel a stake in the business.”

Gordon Brown MP Chancellor of the Exchequer, U.K. October 2005

What would it mean to your business if you could recruit high-calibre employees that were as committed to achieving success as you are?

Attracting and retaining top talent is fundamental to SME business success. Yet owners are repeatedly losing the war for Australia’s best to their public counterparts which boast large budgets and attractive share options.

The war for talent intensifies daily. It is now business critical for private SMEs to find an innovative source of advantage to attract, retain and develop talent for long-term success.

For the first time in Australia, you can build an innovative reward plan for your SME that not only attracts, retains and motivates top people – but encourages committed, ownership behaviours for exceptional business performance.

Designed specifically for private SME businesses, Peak Performance Trusts is a uniquely effective employee ownership plan that turns employees into enterprise partners – working creatively and proactively as a team to outperform your competition.

Simple to implement and inexpensive to adopt, a PPT builds long-term profit for your business.

Peak Performance

If you have read this far, chances are you are the owner of a private SME business. You are seeking a source of competitive advantage and long-term traction, but the key to this — finding and keeping top executives who care as much for the business as you do — is an ongoing and expensive problem you have probably been unable to solve permanently.

PPT offers a systematic and practical approach to this issue, primarily allowing you to:

• Reward executives for increasing operational results
• Get a tax deduction for income recognised by the participating employee
• Affect strong retention behaviours
• Align payments with your company’s ability to pay
• Motivate and focus employees on long-term goals
• Directly assist in achieving short and long-term goals
• Compete for talent with large budget public companies offering attractive share plans by offering a ‘piece of the action’

PPT also offers secondary benefits to your business which you may not have considered:

• Assist the funding of your Succession Plan (especially if the logical future owners of the business are current employees) and
• Offer new business opportunities
• Enhance your company’s culture
• Provide competitive advantage to early entrants
• Assist in the wealth creation of owners and employees

Do you like the sound of this? Why not attend one of our seminars, where you will experience an informational session which goes Beyond Advice to help you design an effective reward system. Come along and receive a copy of the new PPT book called ‘Build It’.

Attracting, retaining and motivating top talent is unquestionably a top business imperative for SMEs, and should be the objective of your compensation strategy. There are many different types of incentives plans, but few which are specifically designed for private Australian business.

How does it work?

In building a Peak Performance Trust, the employer creates an investment trust into which it makes contributions on behalf of employees. The company commits to investing a predetermined amount on a regular basis – according to participants achieving pre-determined performance goals.

As the profit increases, so too does the share that employees benefit from, but if profit is not increased, no further allocation is made.

You get all the assistance you need from Peak Partners to ensure your PPT plan continues to work for you and your employees. This is because PPT is able to:

• Assist the funding of your Succession Plan (especially if the logical future owners of the business are current employees) and
• Offer new business opportunities
• Enhance your company’s culture
• Provide competitive advantage to early entrants
• Assist in the wealth creation of owners and employees

Learn everything you need to know about designing an effective employee incentive plan for peak performance in your private SME here:
Free Factsheet – The Complete Guide to Employee Incentives

Want to know more? Contact Us to arrange a discussion about your business goals and how PPT can help you reach them.

Plan Essentials

A number of technical and practical things can be done to improve the effectiveness and relevance of a long-term incentive plan. Below are some of the top tips for the success of your program.

1. The fundamental tenet of PPT is rewarding profit performance. As the profit increases, so too, will the percentage share – to the benefit of you and your employee.

2. We recommend a minimum service period before participation is allowed (say, 12 months). This way, bonus payments can be calculated on profit performance. This will help you to set and measure individuals’ KPIs – again to the benefit of you and that employee.

3. The objective is to reward your employees’ contribution to improved performance, so you should review the KPIs applicable to your employees for this programme. Keep it simple – keep the KPIs relevant and reflective of the things that employee can influence.

4. It would help to market-benchmark the base remuneration for all employees, every two years. If you do this, a financial review with your accountant will ensure relative incentives are correctly apportioned according to salary levels – and your plan remains effective.
NB This system of base remuneration should be implemented after PPT, and employees given advance notice.

Success Stories

Complete success stories are coming soon to this site. In the meantime, if you would like to receive some case study information, please Contact Us and we will be happy to share some experiences with you directly.

Until then, have a look at the performance of benchmarked clients since their new compensation plan was introduced: