Performance related pay fails to grip nation…

Only 14% of UK employees receive performance-related pay, compared with a European average of 21%, according to an international survey by Kelly Services employment agency.

The survey of almost 19,000 employees in 12 European countries found that employees in the financial services industry were the most likely to have part of their salary linked to performance targets, with more than a quarter (28%) receiving bonuses.

Workers in the education sector were the least likely, with just 5% of employees picking up bonuses.

Almost a quarter (23%) of transport/distribution industry staff had part of their salary tied to performance targets, followed closely by retail (21%) and travel/leisure (20%).

Workers in business services did not fare well, with just 16% receiving bonuses, followed by IT (13%) and science/pharmaceutical (11%).

Employees in the engineering industry also fared much better than those in the manufacturing sector, with just 8% of manufacturers receiving bonuses compared with 18% of engineers.

More than a quarter (28%) of UK employees who do not receive performance-related pay also thought that they would perform better if they did.

…yet doing well is key to pay deals

Half of employers use organisational performance to determine their pay rewards, according to the fifth annual reward survey by the Chartered Institute of Personnel and Development (CIPD).

The survey of 535 organisations, with a total of 1.4 million employees, found that just over 40% of employers benchmark against inflation rates, and 35% compare their reward packages with competitors.

Recruitment and retention issues also play a part, with 29% of employers saying it influences their approach to reward.

More than a quarter (27%) of respondents to the CIPD survey also admitted that pressures from unions and staff had an impact on their reward strategy. The level of government funding is also an important factor for 21% of respondents.

But the National Minimum Wage had little impact, with less than 10% of employers taking it into consideration.

Comments are closed.