LTB 108/10 - POL: Sales Incentive Scheme - Quarters 3 and 4

[TrueBlueTerrier]

No: 108
Ref:
Date: 05 February 2010
TO: ALL BRANCHES WITH POSTAL MEMBERS
Dear Colleague
POL: SALES INCENTIVE SCHEME - QUARTERS 3 AND 4
Branches will be aware that in August 2009, our members voted YES for the introduction of a new Sales Incentive Scheme effective from Q2 2009/10. The scheme was constructed to incentivise and reward our members for their hard work in increasing sales.
Since the scheme has been running, several factors, not least the tough economic environment have lead to 173 Crowns not being eligible for the Q3 bonus payment as their performance was below 80%.
As a consequence of this performance, POL and CWU undertook a joint examination to consider how the scheme could be improved. This review resulted in an agreement for a number of amendments to the scheme, which will lead to a better-than-projected reward for our members for Q3. This agreement, which is contained in the associated letter from Matthew Starks, Head of HR Network, Reward & Employee Relations, has been endorsed by the Postal Executive.
A Joint Statement confirming the new arrangements is also associated with this LTB.
The changes to the scheme can be summarised as follows:

1. Removal of the Blue product category from the bonus calculations for Q4. As a consequence, the Red and Yellow categories will carry a 70% and 30% weighting respectively
2. Credit Cards move to Red category and Guaranteed Capital Bond to Yellow
3. New weightings applied to Q3 outturn which results in extra payments totalling £202.5k to be paid as appropriate in February salaries
4. 319 Branches will now be eligible for a payment in Q3 (previously 200)
5. The payments for Q3 therefore total £560.5k
6. The scheme will be extended to run until March 2012

Removal of "Blue" Area from Weighted Bonus Calculations
The inclusion of only 2 products in the Blue area resulted in a disproportionate impact on the total bonus payments as some Crowns experienced difficulty in selling credit cards in Q3. Therefore, for Q4, the Blue category will be removed and Credit Cards will move into the "Red" area and Guaranteed Capital Bonds into the "Yellow" area. Had this arrangement been in place in Q3, the Crown performance would have been 93.5% rather than 83.7%.
Enhanced Payments for our Members
Due to the new arrangements described above, an extra £202.5k (after clawback) will be available to our members. If the new calculations result in a higher performance above the 80% threshold for Crown Offices, the top-up payment will be made in February salaries. Additionally ,where the revised arrangements result in the movement up to higher banding then the difference between the two levels will also be paid as a top up payment in the February salaries. If however, the modifications result in a lower performance for your Crown, we have agreed with POL that there will be no clawback of the bonus already received with the January salaries. A spreadsheet which lists payment by Crown Office is attached to the Joint Statement.
The table below summarises the positive changes in bonus payments:
Band
Payment per colleague
(£)
Number of Offices under old weightings incl. Blue category
Number of Offices under new weightings
Excl. Blue category
≤115%*
312.5
12
46
≤110%
287.5
2
9
≤108%
268.75
4
8
≤106%
250
6
8
≤104%
237.5
7
9
≤102%
225
9
11
≤100%
212.5
24
49
≤95%
106.25
39
56
≤90%
62.5
40
71
≤85%
31.25
52
52
<80%
0
173
51
includes Crowns which are above 115%
Extension of the Sales Incentive Scheme
In view of the positive modifications agreed to the SIS, we are confident it is now fairer in terms of rewarding our members for their efforts. We are happy to extend this scheme by a further year, which takes it to March 2012.
All enquiries on the above should be addressed to Claire Bowers on cbowers@cwu.org or 020 8971 7361.
Yours sincerely

Andy Furey
Assistant Secretary

LTB108.doc

[Running Man]

Unbelievable!!!
I will never ever understand why on earth the CWU recommended this ridiculous bonus scheme to its members nor will I understand why members acted on that recommendation.
A blind man on a galloping horse could have seen that this scheme was far too complicated to keep on top of and weighted far too much in favour of the good credit card and five year saver offices.
Thank goodness somebody has seen sense before it's too late and made the scheme at least a little bit more simple to understand and a little more fair.
Could somebody please explain what is so wrong with simply using the percentage income of all the focus products as the basis for a bonus? This figure is provided every week, is simple to understand and even more simple to spot where bonus is either being lost or made.
Sounds like it could be a little too simple for the senior managers of POL who have made an artform of taking the really simple things and making them incredibly complicated.
(Need I mention the LEAN project?)

[The BFO]

Unbelievable!!!
Could somebody please explain what is so wrong with simply using the percentage income of all the focus products as the basis for a bonus?

What is so wrong with having no Bonus Scheme at all, and putting any available money into the salary? Motivation would be taken care of by having competent management and a sensible cause to work for… ‘Pie in the sky’ of course.
Having seen a few Bonus Schemes in my time, they all seem to me to have some common themes:
1. The vast majority of recipients have no idea how they work, and remain unaffected by the presence of the scheme.
2. They all become mired in controversy, and complicated contradictions.
3. The few who benefit the most are motivated, the majority in the middle remain ambivalent, and those who lose out are de-motivated, making the overall effect zero.
4. The particular area concentrated on – at the moment Sales, but in the past we have had Waiting Times, Errors, Efficiency etc. – gets the ‘benefit’, but everything else gets forgotten.
I was amused yesterday to see lying discarded in the Rest Room, an expensively produced glossy ‘Tracker’, with two figures from Quarter 2 entered, now redundant because of these changes.
And so it goes on…