Gary Caswell, managing director of Bretton Consulting, writes: I am uncertain whether you are responsible for purchasing direct goods that have an impact on the cost of sales, indirect goods or services that affect the expense line, or a combination of the two. I will try to provide a reasonably generic answer that addresses all three possibilities.

You recognise in your question that many would see the achievement of annual cost savings as a fundamental part of procurement's value-add, and therefore already "paid for" in your annual remuneration package. However, staff in sales are almost always remunerated at least in part on a performance-related basis, as are others in fields as diverse as investment banking, manufacturing and retail. So performance-related precedents exist almost everywhere in the private sector and probably in your organisation too.

How does this help or hinder your argument, and are there examples of performance-related pay schemes more directly related to your own? I assume that by a percentage of your savings coming back to the department you are referring to some kind of payment to your team rather than a less obvious investment such as increased headcount, new laptops or better mobiles. Although there is a major difference between the two, the link between procurement's reward and savings remains direct.

While the aforementioned professions are remunerated on a performance-related basis, some - perhaps most - will have smaller base salaries that reflect add-ons such as commission, annual bonus and so on. So arguing that your team deserves specific financial recognition based on achievement of savings, and quoting sales as an example, has weaknesses.

Also, if it is known that we are rewarded for making savings, our partners may become suspicious of our motives and believe we are only focused on financial benefits. This can make cross-functional working hard if the stakeholders think we are happy to sacrifice quality and service for savings. I have experienced this in a multinational firm.

My response may seem negative but it is far from doom and gloom. I have worked in organisations where savings-related remuneration schemes have worked. One business, which was able to measure savings very precisely (and this isn't always straightforward), brought in a procurement bonus scheme linked to savings targets at an individual and departmental basis that allowed staff to double their salaries.

In summary, you must consider the impact on stakeholders, ability to measure savings precisely, whether to pay on an individual or department basis, and whether it should be against the achievement of "stretch targets" - over and above your annual target.