Sports Direct, the U.K.'s leading sporting goods retailer, plans to pay its 2,200 full-time workers a share bonus averaging £44,000 ($71,000) as it exceeded its profit targets for the second year in a row.
The firm's bonus share scheme pot of £88 million will pay out shares worth an average of about £30,960 to each permanent staff member. Combined with last year's bonus payout, the Sports Direct bonus scheme, which was first announced in 2009, will see full-time staff awards worth an average of £43,860 -- more than twice the average salary of £20,000.
In its annual report, the owner of the Sports World and Lillywhites stores said the bonus share plan was "designed to motivate colleagues, help improve retention of key employees and to align the interests of employees and shareholders."
"We introduced the bonus scheme with the aim of ensuring that the whole group was aligned to try and meet the ambitious targets for the continued growth of the business," Dave Forsey, chief executive, told The Financial Times. "We are looking to reward our colleagues as they truly deserve -- we couldn't have achieved the growth over the past two years without them. There is no doubt that this unique scheme has improved staff retention."
Twenty-five percent of the bonuses will be paid in 2012 with the remaining 75 percent to be distributed in 2013. Part-time workers are not included in the bonus program.
A new bonus program to cover the next four years was announced, although targets would have to be hit every year for a similarly generous payment to be made.
The only other major U.K. retailer with a known bonus plan is John Lewis, which in March indicated it paid out an average of £2,500 in cash to its 76,500 personnel -- equal to nearly eight weeks' pay.
Speaking to The Scotsman, Craig Phillipson, managing director of Shopworks, the international retail consultancy, said he was a big fan of bonus programs.
"I think they help to focus the minds of people and help them realize that better customer service leads to better sales figures," said Mr. Phillipson.
"The only circumstance in which the scheme is not healthy is where the staff become overly aggressive on the shop floor, where customers can feel like they are being harassed. But a well-considered incentive program which applies across the board in a company, such as what's done at John Lewis, is a very good thing."
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- Sports Direct staff in line for £87.5m bonus - The Financial Times
- Big bonuses not just for bankers as shop workers get £40,000 - The Scotsman