Employers need to review staff communications about the economic pressures on pay in order to keep them motivated when awards are constrained, the Chartered Institute of Personnel and Development (CIPD) has warned.
The CIPD’s Employee Attitudes to Pay survey found that 53% of workers received a pay freeze or cut in 2011, a larger proportion than in any year since the survey was first carried out in 2008. However, one-third (33%) of employees said that their organisation did not explain the pay decision.
While those employees who did receive a pay rise in 2011 were found to be mostly satisfied with their pay, with a net satisfaction score of +56, satisfaction levels were considerably lower among those who were not told the reasons behind the rise.
The net satisfaction scores for staff who had their pay rises explained to them was +68, compared with +33 for those who were not given the information behind the rise.
Charles Cotton, rewards adviser at the CIPD, warned that there is “clearly a need” for improved communication of any positive news so that employees feel valued and understand what is important to their organisation.
“2012 looks like it will be another year of subdued pay rises for many in the private sector and pay freezes for most of those in the public sector,” Cotton explained. “While inflation looks set to fall, and personal allowances are due to rise, these will not be enough to increase real earnings back to their pre-recessionary levels.
“The challenge for employers is to keep staff motivated at work while many employees see their living standards hit. Organisations should review how they communicate the economic realities the business faces and what needs to happen for pay to increase.”
According to the 3,056 employees surveyed, the most common explanations given to them for their pay decisions were: the state of the economy (45%); how much money the organisation has to spend (38%); and the performance of the individual (15%).