Designed to reward employees for working harder and distribute pay more fairly, performance-related pay helps employers attract talent and ensure all employees are working to the best of their potential. However, to ensure these scheme are executed fairly and with a minimum of favouritism, it is imperative that the criteria for different rates of pay are clearly set out, agreed by both employer and employees and, most importantly, objective and measurable.

The type of targets and rewards will largely depend on the objective or purpose of the scheme. To encourage loyalty to the company, employers often offer reward schemes and shares for employees, depending on length of service and achieving long-term targets. If an employer is simply trying to improve employee performance, they will likely use short-term commission-based schemes, or bonuses. The details regarding all bonuses, rewards or payments should be outlined in the employment contract or other written documents.

There is great variation in company sick pay schemes, but most involve a minimum amount of time for which the employee must have been working for the employer. After this period, the employee may be entitled to full pay for a certain amount number of week taken off ill, then half pay for the next period and so on, until additional sick leave may become unpaid.

There is an element of discretion allowed within contractual sick pay and, in some cases, employers may choose to pay an employee sick pay when the employee doesn’t entirely qualify under the written agreement in the contract. Similarly, some employers may choose to refuse sick pay if they are unconvinced of the circumstances surrounding the illness. Naturally, this carries risks for the employer.

Almost all employers require employees to inform them if they fall ill and, should the illness continue for longer than around a week, most require the employee to provide a doctor’s note to confirm the illness.

If an employee has to take time off work because they are ill, they may be entitled to sick pay. Depending on the specific employment details, this can be either basic statutory sick pay or a special rate of company, occupational or contractual sick pay. By law, there is no certain amount of extra company sick pay to which employees are entitled, other than the basic statutory rate and however much is explicitly stated in the contract. Statutory sick pay is the right of all employees and the legal minimum amount of sick pay they must receive. Please note, however, that companies are not required by law to provide sick pay to an employee who takes time off to care for a sick dependent.

The amount of sick pay to which an employee is entitled doesn’t normally vary depending with the cause of or reason behind the illness. However, in the case of injuries suffered in the workplace or work-related sickness, there may be special policies in place which should be stated in the employment contract. Employees can also make personal injuries claims if their employer is responsible for their inability to work.