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Reward packages prove less than satisfying

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The CIPD’s annual survey on reward management shows that packages may meet business objectives, but they fail to match personal needs. Around 1000 organisations employing a total of 4,764,069 people responded to this year’s survey, which also suggests that reward and benefits packages in the private sector are becoming more individualistic and concentrated on senior management posts.

Karen Giles, CIPD Adviser, comments: “The importance of the market rate in determining salary seems to be growing as organisations aspire to attract the best talent. The survey suggests however that organisations are less good at keeping people happy in their jobs, with too much emphasis placed on business objectives. For example, 36.4% of respondents cited recruiting and retaining employees as the main objective of reward packages compared with just 3.8% who mentioned providing a better work-life balance for employees. This may explain why many reward systems in the UK do not succeed in motivating employees; in fact the reverse is true in some cases”.

Key findings
– 59% of organisations say that market rate pressures is the most important factor in determining overall pay
– Current reward systems are poor motivational tools. 4.2 % said that reward structures were very effective at motivating employees compared with 37% who reported that they had no effect.
– Communication of reward packages is poor. Over one in five organisations report that their employees do not receive any pay information other than on their own salaries while over 40% of organisations do not communicate their reward packages through face to face interviews
– The main priority for reward is the need to retain highly skilled employees (36.4%) followed by supporting business objectives (30%) and rewarding and encouraging high performance (29%)
– 12% of organisations intend plan to introduce a system of flexible benefits as a new perk during the next year
– 5% of organisations intend to phase out offering a company car as a perk during the next year


Notes to Editors


* The survey is free to members and is available on 020 8 944 5326 or from
our web-site: http://www.cipd.co.uk

* Around 1000 organisation responded to this year’s CIPD Reward Management
Survey employing a total of 4,764,069 people

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