Leighton offers £400 bonus incentive to Royal Mail staff

LONDON - Royal Mail chairman Allan Leighton has promised to give each of the group's 200,000 workers a £400 bonus next year, on the proviso that it reaches an annual profit of £600m.

The decision to reward staff for the group's financial performance marks the second time Royal Mail has attempted to motivate its workforce through a "Share in Success" reward scheme. Earlier this year it gave £1,074 to every worker, a total payout of about £200m.

"We've got a really simple deal here," Leighton said. "The people whose hard work leads to success and profit for the company get a share of that success."

This latest scheme will cost Royal Mail nearly £80m should it reach next year's target.

However, the bonus scheme has not been welcomed by workers' union CWU, which expressed concern about the timing of Royal Mail announcement.

In a statement, the CWU said: "We will be seeking an urgent meeting with the Royal Mail board and government to address our legitimate concerns. In particular, we want the company to be more honest with employees about their long-term agenda."

The union said that as far as it was concerned the profit targets announced can only be achieved through significant job losses and major changes to members' terms and conditions. 

"It is time Royal Mail came clean with their real plans and discuss them openly with the CWU," the union said.

Industry watchdog Postwatch was cautiously supportive of the repeat of the scheme.

"It is a matter for Royal Mail management how they choose to incentivise their workforce," Postwatch chief executive Gregor McGregor said.

"Postwatch trusts that they will do it with the full cooperation of the CWU. It's good to see posties being rewarded for the financial success of Royal Mail."

However, he added that he expected to see customer service improve. "We hope that customers can also be rewarded by receiving a level of service they expect and pay for."

Critics of Royal Mail have argued that much of its financial success over the last year can be attribute to price rises, cost savings and a company that effectively still has a monopoly.

However, the organisation has achieved its highest-ever level of service and hit eight out of 15 of its service level targets over the 2004-2005 reporting period. The previous financial year it missed 15 out of 16.

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