CIPD ANNUAL REWARD SURVEY
Results of 10th annual CIPD reward survey published
Competitive positioning of total reward and pay dispersion shows most organisations making cautious strategic choices, although pay positioning in SMEs is more polarised in approach. These are among the main findings of the Chartered Institute of Personnel and Development’s (CIPD) annual Reward Survey, produced in partnership with Benefex.
Respondents to the CIPD survey are “making cautious, market-oriented, strategic choices about reward management through competitive positioning of their total reward offering” relative to comparator organisations. Over half of the 276 respondents say they are positioning reward levels at or close to the midpoint.
The next most common competitive pay position is in the upper quartile, while only one in ten say they are positioning their reward offering in the lower quartile. Fewer than one in ten say they are positioning pay in the top 10% of sectoral comparators and virtually no organisations say they fall in the lowest 10%.
%ADVERT%
The CIPD survey also finds that organisations are more likely to position above market for certain occupations than others:
For senior managers, eight out of ten organisations indicate that they pay above the midpoint.
For clerical and manual workers, seven in ten pay above the midpoint
Key survey findings
The tenth edition of the CIPD’s annual reward management survey – this year based on a sample of 280 respondents – also finds:
Market rates are considered the most important factor in determining pay levels for well over half of all respondents (60%).
Ability to pay is the most important factor for one in four organisations (26%).
For managing pay progression, the most common approach is to link pay to a measure of individual performance (61%), either on its own or in combination with another factor, such as competencies.
Two-thirds (67%) of organisations are operating performance-related reward schemes.
Merit pay rises (56%) and individual bonuses (54%) are the most common forms of performance-related reward.
One in three (29%) organisations also operates individual non-monetary recognition awards for clerical and manual employees.
A final word
“In the context of public sector spending cuts and cautious economic growth in parts of the private sector, it’s not surprising that not all organisations have been in a position to make a pay award this year. The findings also show that this competitive environment is having the effect of encouraging employers to focus on linking pay rises and bonuses to employee and organisational performance.” - Charles Cotton, performance and reward adviser, CIPD.
“With the backdrop of longer working lives and the need for employees to build up larger savings for retirement, it’s not surprising to see so many employers now embracing the removal of the default retirement age and an acceptance that employees should be allowed to do the job as long as capable. However, with the significant burden of pensions auto enrolment, it’s fascinating to see such a large percentage of organisations state that the changes would not impact on the value of their pension offering, but that the Government is acting in a responsible way in educating and communicating to employees about the pension reforms.” - Matt Waller, CEO, Benefex.
Want to know more?
Title: Reward Survey, Chartered Institute of Personnel and Development, produced in partnership with Benefex, May 2011.
Survey details: The reward survey was conducted between 10 February and 11 March 2011. A total of 276 employers responded: 50% from private sector services; 22% from the public sector; 16% from manufacturing and production and 12% from voluntary, community and not-for-profit organisations.
Availability: The 49-page survey can also be downloaded in PDF format from www.cipd.co.uk/hr-resources/survey-reports/reward-management-2011.aspx.
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”. To find out more visit www.cipd.co.uk.
Benefex is the “largest online reward and benefits provider in the UK . . . delivering fully integrated reward and benefit portals including total reward, flexible benefits, savings, education, broking and auto enrolment. For more information visit www.benefex.co.uk.