Merit pay retains its popularity


Merit pay retains its popularity

Merit pay remains the most frequently used contingent pay practice, according to a survey by pay analysts IRS.

The proportion of survey respondents using this approach now stands at 68.7%, marginally higher than last year's figure of 67.1%. The payment of a cash bonus to employees is the second most popular performance pay tool, used by 57.9% of survey respondents.

Other key survey results

  • Voluntary benefits -- where employers gives employees the opportunity to purchase a selection of their own or other companies' goods and services at a discounted rate -- are now used by 17.8% of survey respondents.
  • Employee share schemes are operated by 31.6% of survey organisations, which compares with only 21.1% in the 2003 survey.
  • As many as 15.2% of respondents said that they planned to introduce flexible benefits within the next 12 months.

Want to know more?

Title: "Pay prospects survey", IRS Employment Review 811/Pay and Benefits, 12 November 2004.

Methodology: Data was gathered by a postal questionnaire mailed to IRS subscribers and non-subscribers in September 2004.

Survey sample: The survey is based on information received from 297 private sector organisations in the UK employing 908,000 employees.

Availability: To purchase this six-page survey contact the subscriptions department at IRS in London, tel: 020 8686 9141 or visit

Posted 19 November 2004