City Pub Group’s chairman Clive Watson has said he is optimistic about the impact that its new weekly employee bonus scheme will have on performance within his pubs.

Speaking at the annual MCA Pub Conference earlier this week, Watson said that while the new scheme is costing £700k – more than half the previous scheme of £300k per year, he believed that additional sales were offsetting the extra costs.

The business introduced the new scheme earlier this year after feedback from staff representatives at its board meetings led them to consider a different option to the existing annual employee profit scheme it had in place – which paid out £750 per employee in 2017. 

Employees felt that they had little influence over the level of the bonus and that being annual it was less motivational. With the new bonus scheme, budgets are set per pub and if they are hit then all staff at that pub get an extra £1 per hour. If the budget is exceeded by 10% of more, staff get an extra £1.50 per hour.

Watson was accompanied by one of City Pub’s employee representatives, Ludovica Pilot, on stage. She said the new scheme meant that, wherever employees were based, they felt part of a bigger company and they are more attached to their sites and more motivated.

“The response has been incredible; we felt like it’s really worked and has achieved what we wanted it to. Everyone from a kitchen porter just joining the company to an assistant manager that has been there for year have all been very positive,” she said.

Watson said: “I have believed that for a long time when a company is creating wealth, where possible it should give some of that created wealth back to employees.” Adding that happy employees mean happy customers, shareholders and chairman.

Watson said there had previously been a surge in people leaving after they had received their annual bonus, so he is hoping this smooths out the bumps and makes things more consistent. He said it was too early to say whether the rates of retention are improving, “but my gut feeling is that they are”. “Clearly it helps with recruitment, and I’d like to feel it’s helping from a productivity perspective,” he added.