The Chartered Institute of Personnel and Development has warned that unless employers improve communications regarding pay decisions, employers will not only fail to meet rising expectations but are unlikely to see “sought after productivity gains”.
The “Employee attitudes to pay and pensions” survey by the CIPD found that 48 per cent of British people were unsatisfied with their employer’s pay decision.
The survey found that 51 per cent of workers received an explanation over the pay decision made by their employer in 2014. The explanations covered both a company’s decision to increase, cut or freeze the overall wage bill as well as the choice to raise, reduce or freeze an individual’s wage.
Charles Cotton, an advisor at the CIPD, said: “Many employers will be spending a lot of money on increasing their employees’ pay as part of their annual pay reviews. But to get a return on this investment our research suggests that employees are more likely to be satisfied with the outcome if the organisation takes the time to explain the reasons behind it.
“These employers are likely to grow and prosper at the expense of firms that are unable or unwilling to communicate about staff pay.
“Employers may be missing an opportunity by not explaining to staff what values and behaviours are rewarded. The survey finds that 76 per cent of staff report that they’ve not been told what they need to do in order to receive a pay rise this year.”
An ever increasing number of employees felt that their pay rises did not reflect their performance at work, up to 23 per cent in 2014 from 19 per cent in 2013. The survey also revealed that employees didn’t rate their employer’s ability to assess their performance very highly, nor do they think that their employer is particularly good at rewarding or recognising it.
Cotton added: “Organisations could improve how they reward and praise individual and team achievements as well as how they manage and develop performance. The challenge for employers is to connect investments in increasing staff pay with what the business really needs.
“Without this direction, many will struggle to see a step-change in business performance and could face wider issues with recruitment and retention if employees think they can achieve a higher salary elsewhere.”