Tesco store with poppy

Tesco staff are to get rewards of up to 5% of their annual income if they help CEO Dave Lewis meet his targets for recovery.

The announcement came as Tesco declared staff would get bonuses of up to £2,000 in June, after what the retailer described as “early signs of improvement in performance” at the retailer.

The payout, under its Shares in Success scheme, is worth 1% of annual earnings for staff who joined the company before February last year and will be capped at the maximum of £2,000.

However, Tesco said it planned to offer bonuses five times this size under the new scheme to be revealed later in the year.

Lewis first revealed plans for a Turnaround Bonus in January, alongside plans to scrap Tesco’s final salary pension scheme, which union leaders pledge to fight when a consultation started last week.

Tesco also announced in January that staff would get no annual pay rise.

“Looking forward to the end of this financial year, the Turnaround Bonus will reward UK colleagues if we are successful in delivering the turnaround plan,” said Alison Horner, chief people officer, in a message to staff.

“The detail of the Turnaround Bonus is still being developed, but we want you to know now that if we achieve our turnaround plans during the 2015/16 financial year, it will represent a share award of 5%.”

Tesco said it would consult with unions on the proposed changes.

Last week Lewis revealed around 5,000 roles were lost as a result of the scrapping of the team leader management structure and closure of 43 stores, although he stressed that there had still been a 4,000 net increase in staff since October.