REWARDING PERFORMANCE
Merit remains key when setting pay
Paying for performance has become a cornerstone in the reward policies of many private sector businesses, according to figures gathered by the Confederation of British Industry, the UK's main employers' organisation, and human resources consultancy Mercer.
The 940-company survey found that reports of the demise of merit pay have been much exaggerated. It remains the norm rather than the exception across a large swathe of the private sector. As many as 58% of private sector employers operate formal assessments of individual performance to set pay.
Mechanisms for determining pay
| Per cent of respondents | |
| Individual performance | 58% |
| Company performance | 35% |
| Team performance | 3% |
| Piece rates | 3% |
| Length of service | 2% |
Source: Employment Trends Survey 2002, Confederation of British Industry and Mercer.
What you will find in this report
This 38-page survey covers a wide range of employment issues, including pay and benefits, employee consultation, flexible working conditions, training and skill shortages, and employment/HR policies.
Key findings include:
A final word
"This survey shows that assessment of individual performance and links to company performance/profits were the main methods for determining employees' pay. However, these strategies were complemented by the use of alternative reward methods, such as team performance and length of service." - Confederation of British Industry and Mercer.
Want to know more?
Title: Employment Trends Survey 2002: Measuring flexibility in the labour market, Confederation of British Industry and Mercer Human Resource Consulting.
Methodology: Survey sent to 9,000 private sector employers in March and April 2002.
Survey sample: Information supplied by 940 companies - a response rate of 10.4% - covering 3.5 million employees. Two-fifths of participants employed fewer than 200 employees and a tenth had more than 5,000 employees.
Business sectors: Manufacturing organisations represent 38% of respondents, with 52% in services.
Availability: Contact CBI publications sales, tel: 020 7395 8071, email: pubsales@cbi.org.uk
If you have any questions or comments on the report contact:
Mark Edelsten, Mercer Human Resource Consulting, Dexter House, 2 Royal Mint Court, London EC3N 4NA, tel: 0207 488 4949 or email: mark.edelsten@mercer.com. Jump to the Mercer web site at www.mercerhr.com.