Reward programmes fail to deliver results

Only three in 10 companies believe their reward programme is very effective in attracting and retaining talented employees, new research reveals.


Mercer Human Resource Consulting surveyed more than 360 companies in 19 European countries and found compelling reasons for companies to re-evaluate their approach to employee pay and rewards.


Only two in 10 companies believe their reward programme is very effective in influencing the right employee behaviours.


Just half the reward programmes analysed by Mercer differentiate between high and low performers.Nearly a third of the companies surveyed expressed concern that reward costs will become unsustainable in the next five years.


“A reward programme should motivate employees to achieve business objectives,” said Paul O’Malley, principal at Mercer. “If the reward strategy is not linked to the business strategy, an organisation could find itself moving in two directions.”


But while more employers are taking a holistic view of reward, just 57% of respondents believe their employee reward strategy is linked to the company’s business strategy.

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