CIPD ANNUAL REWARD SURVEY
Employers plan to focus bonus payments on those who contribute the most, says CIPD
This is particularly true in the private sector services and in manufacturing and production, where employers are most likely to direct a greater percentage of the overall pay pool to their top talent. Results from the CIPD survey of almost 800 reward professionals show that one in five (22%) private service sector firms and 17% of manufacturing and production companies intend to increase bonus payment “differentiation” between “normal” and “high-performing” staff.
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Priorities for 2010
This year’s top reward priorities will be ensuring reward is aligned with the business strategy (52%) and that reward packages are market competitive (51%).
While cost minimisation is still one of the key priorities, it has slipped to being as equal a priority as ensuring reward is internally fair (44%).
Growth in recognition and non-cash incentive schemes
Other findings reveal that there has been a sharp rise in the number of employers operating recognition and non-cash incentive schemes:
Four in ten employers (41%) now have recognition schemes such as employee of the month, this is up from 31% last year.
The number using non-cash incentive schemes has also jumped from 17% to 30% this year.
Charles Cotton, CIPD Reward Adviser, said: “It’s not surprising that these non-cash schemes have gained popularity last year when many employers had limited resources to reward staff. Most will be reviewing their non-cash incentive and recognition arrangements in 2010 and it will be interesting to see if these fall by the wayside when the economy picks up.”
Key survey results
Only a minority of respondents (49%) know the size of their total remuneration spend (i.e. pay, benefits and other financial rewards, plus national insurance contributions).
A total reward approach has been adopted by 33% of the sample, while a further 21% plan to take this approach in 2010.
71% of the respondents use variable pay, with these arrangements far more common in manufacturing and production and private sector services than the public sector.
A large proportion of those employers with bonuses schemes plan to review or amend them in 2010 to ensure that they align to the organisation’s objectives.
A final word
“The survey results show a distinct shift in the approach to reward. Employers seem more confident about the economic outlook in the months ahead and have refocused their thinking with that in mind. Many will be going back to the drawing board to revisit their reward strategies in the wake of the recession and may be keen to link pay more with performance. The rise in the number of employers increasing the pay award differentiation confirms that employers want to ensure that whatever profits they reap in 2010, a better proportion should go to those who have added the most value.” - Charles Cotton, Reward Adviser, CIPD.
Want to know more?
Title: Reward Management 2010: Annual survey report, Chartered Institute of Personnel and Development, February 2010.
Survey details: This report sets out the findings of the CIPD's ninth national survey of reward management policy and practice. The analysis is based on replies from 729 employers in organisations across all industrial sectors.
Availability: The report is available to download in PDF format from the CIPD web site at www.cipd.co.uk/subjects/pay/general/_reward_summary.
The Chartered Institute of Personnel and Development (CIPD) is “Europe’s largest HR and development professional body with over 135,000 members, supporting and developing those responsible for the management and development of people within organisations. For more details visit www.cipd.co.uk.