Post Office’s Operational Excellence Incentive delivers strong performance in first month

Post Office has distributed remuneration payments to postmasters through the Operational Excellence Incentive for the first time, with 83% of branches receiving a boost in their variable remuneration in September, and an overall network payout of an additional 3.5% of total remuneration.

The Operational Excellence Incentive is an opportunity for postmasters to earn a top up of up to 5% of their variable remuneration every month by meeting existing operational requirements for the running of their branch, and is part of Post Office’s ongoing commitment to improving branch profitability for postmasters and driving further improvements to postmaster remuneration.

Since announcing the programme in March 2024, Post Office has been working closely with postmasters to prepare for the implementation of the Operational Excellence Incentive, which formally started in August 2024, and has already seen positive results from the programme, with performance running ahead of where was initially anticipated.

Now with the first payments having been made to postmasters, Post Office can confirm:

• The total value of payouts to postmasters in the first month (August) was £871k (paid in September’s remuneration statement).
• 83% of postmasters received a boost to their variable remuneration as a result of the Operational Excellence Incentive.
• If this performance is to be continued, on an annualised basis this would be a payout of £11.3m versus the anticipated figure of £10m when the scheme was announced. September trading is expected to yield an increase in payment on August.
• Postmasters across the network will receive a boost in their variable remuneration in October (for September trading) of 3.62%. Over 3,000 branches achieved a perfect score for meeting existing operational requirements and will get the full 5% payment.

Post Office has been working closely with postmasters to ensure the scheme works for the network and sharing training and support guidance on the incentive to help postmasters increase their percentage of remuneration. Steven Boyd, who is postmaster at two Post Offices in Plymouth and runs two Banking Hubs, participated in the pre-launch period and received the maximum 5% remuneration for the August trading period.

Since taking over as postmaster four years ago, Boyd has shown a huge dedication to improving the commerciality of his branches, investing time in training staff and embracing processes internally to ensure his branches run accurately and transparently with his customers and community.

With a background in retail banking, Boyd sees significant benefits from the Operational Excellence Incentive scheme through the monthly breakdown of data postmasters receive, providing the insights needed to realise what changes are required in branch to make tweaks and improvements in their back-office running.

Steven Boyd, postmaster, said, “I’m always looking for ways to better run my retail stores, from finding ways to save money to ensuring my staff are receiving regular training. I am fully supportive of the new Operational Excellence Incentive as it encourages everyone, across the whole network, to follow the same processes and bring us all on the same journey of ensuring our branches are run the best way they can to save us money, and in turn provide us with greater levels of remuneration. The last few months have been incredibly valuable for the running of my branches because of the clear breakdown of data we’ve been provided each month, which has given us the guidance we need to get our processes to the strongest place to receive the highest percentage of rem. Since the incentive was announced, we’ve been able to identify areas that required our attention, increasing the percentage of rem we’d likely receive at all of my branches.

“The incentive is celebrating work that we have always done, and it really feels like Post Office is engaging with us postmasters in a transparent way to get it right, all with the same collective goal. We can’t accurately predict how many people will come into our branches each month and how much money they spend – but one element we can take control over is how effectively we can complete our back-office processes.”

Pete Marsh, Retail Operations Director at Post Office, said, “We are committed to support postmasters as they consistently look to improve their branch profitability and their remuneration. It’s encouraging to see the already hugely positive results from the incentive, with performance ahead of where we initially had anticipated. Postmasters sit at the heart of Post Office and by incentivising them to meet existing operational requirements for the running of their branch we can both directly reward them but also create a win/win cycle where savings generated can fund further remuneration improvements.”

Post Office’s network of 11,500 branches across the UK provide vital services for communities. This scheme supports postmasters as they continue to adapt their retail offering to the ever-changing landscape, providing recognition and remuneration for time already spent on back-office activities.