Half of organisations use individual arrangements, including spot salaries, to set base pay, according to the latest annual survey of reward management from the Chartered Institute of Personnel and Development. Based on replies received from 525 organisations, this year’s survey finds little evidence of a move towards broad banding or job families in setting base pay.
Ability to pay is the most important factor used to determine base pay within the chosen structure – 46% of organisations cited it compared with only 7% stating that collective bargaining is the most influential factor in pay determination.
Individual performance is used by almost three-quarters of the organisations in the CIPD survey to determine pay progression, followed by competencies, market rates and skills. Only 35% of employers base pay progression on length of service.
The ability to pay is by far and away the most important factor in setting the pay review budget, well ahead of other factors including the going rate and any recruitment and retention issues. Just over a quarter of respondents plan to change pension arrangements in the next 12 months, the survey suggests.