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This commentary provides guidance on the KPI Plan you will create using this document. We recommend that any amendments you make to the KPI plan be reviewed by a workplace lawyer, to ensure the plan remains compliant with relevant laws and limits any legal risks for the business.
For example, if the policy was to exclude casual employees, this may make the policy indirectly discriminatory against employees with carer responsibilities, who can only work on a casual basis.
The KPI plan, like the Incentive and Bonus Policy document, is intended to operate for a specified period, which you will be asked to nominate in the policy. At the expiry of the nominated period, you will need to reissue the KPI plan and policy if you wish to reoffer the incentive and bonus scheme to your employees. We have drafted the policy in this way, to enable the business to trial the policy for a period of time (for example, 12 months), to see if it is appropriate and what (if any) changes need to be made to better suit the business.
You will need to create a new incentive KPI plan for each category of employee who will be entitled to participate in your business’ incentive and bonus scheme. We have only included a KPI plan for one category of employee. We have included some standard criteria in the plan. However, you will be able to include different criteria of your own.
For the incentive KPI plan to operate appropriately, you will need to ensure the maximum incentive percentage offered to the relevant employee under KPI 1 — 'the business’ revenue goal' and all the other KPIs listed below this category (including any you add), total 100%.
Regardless of any incentives or bonuses your business decides to offer to employees, you must comply with all relevant industrial instruments in relation to the payment of wages and other entitlements to your employees.
If you are unsure about any of the tax implications in relation to any of the rewards your business will offer to employees under this KPI plan and incentive and bonus policy, you should obtain advice from your financial adviser prior to implementing this plan and associated policy. For example, FBT or other types of tax may be payable in relation to particular rewards your business chooses to offer under the policy.
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Important note to subscribers
The commentaries and documents in HR Advance are updated as necessary, to keep them relevant. You should familiarise yourself with the relevant commentary each time you create a document.
This document has been drafted to suit a wide variety of businesses, with a number of options available to enable you to customise the document to better suit your business. Nevertheless, you may need to make other changes to the document so that it suits the specific needs of your business. If you make additional changes, we cannot guarantee that the changes and modifications you make to the document will be legally compliant or enforceable.
This commentary and any additional information provided to assist you in creating this document, does not constitute legal advice.
If you are unsure about any aspect of this document (including the changes or amendments you make to it), you should seek appropriate advice from a lawyer, skilled in these issues. You should consult with your financial advisor in relation to any relevant taxation or financial issues concerning the document you create.
After creating this document, you should read through it carefully to make sure it meets your business needs and is consistent with other industrial instruments, policies and procedures which operate in your workplace. This commentary is not designed to be provided to employees or other workplace participants. |
Further information
Further information on how to use this document can be found at the 'How to use these policies' link on the Policies page of the HR Advance website.
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