As City Pub Group unveils its trial of paying weekly bonuses to all staff, James Wallin talks to joint managing directors Rupert Clark and Alex Derrick about adapting the approach to pay and incentives for a new generation of workers.

“You assume you know what is important to staff but for Generation Z there’s a whole new set of priorities and if you don’t adapt to meet those, you’re going to get left behind.”

City Pub Group’s joint managing director, Alex Derrick, reflects on the conversations that led the listed group to take the bold – and complicated – step of offering staff a weekly bonus.

As revealed in today’s full-year results, the Clive Watson-chaired company is replacing its annual profit share scheme with the new approach, which was first trialled in six sites before being rolled out to the rest of its now 45-strong estate over the past two months.

It sees each pub measured on individual sales targets and if these are exceeded every non-managerial staff member is paid an extra pound per hour worked during that week. If the target is exceeded by 10%, that rises to a £1.50 bonus.

The idea arose through feedback to the board from City Pub Group’s employee representative. This identified areas to improve on the profit share incentive, which last year saw each employee who had worked for the full-year receive £750.

Co-managing director, Rupert Clark, explains: “The scheme was very popular but there was a frustration that if you joined a month into the financial year you weren’t eligible. There was also a sense that more flexibility was needed and that a lump sum at the end of the year perhaps didn’t fit with how people are living their lives now.”

Derrick adds: “What we found is that for Generation Z in particular, cash is important but feeling part of a team and a work/life balance is a real driver for them.

“What amazed me is how switched on they are about preparing for their future. They’re not expecting the state to support them when they’re older and they’re already preparing for that. When I was in my early 20s I wasn’t thinking about getting a foot on the property ladder but they really are.”

Both admit the challenges of such an unpredictable wage bill but stress that the positive effect on the teams has been immediate.

“It really feels like everyone’s interests are aligned”, says Clark. “Everyone at every level is so engaged with hitting those targets because they have suddenly become real. They are seeing the benefits of their hard work on a weekly basis.

“We’ve seen people coming in on their days off for team meetings, everyone is pushing ideas to drive extra revenue – whether that’s upselling, asking customers if they want a coffee to go after their meal or looking at food festivals or new events.”

“We’ve seen individuals being mentioned more on TripAdvisor as well”, Derrick adds. “It’s breathed new life into the teams.”

Progress is charted through regular newsletters, which highlight the successes of this week’s “10%-ers” while individual pubs’ WhatsApp groups are buzzing with ideas, the pair insist.

The scheme is being regularly monitored and tweaked but Clark and Derrick say it is clear that the have hit on something that is going to make a big difference to the way the group operates and also how it is viewed as an employer.

Derrick summarises: “The pack is running faster. We are all accomplishing something as a team and we believe that will attract better people and keep existing staff engaged.”