Employers reluctant to award salary increases last year

Contractor accountants who did not enjoy a rate increase last year may take solace from the fact that a large majority of permanent employees either did not receive a pay rise or had their salary cut in 2011.

The CIPD’s annual Employee Attitudes to Pay survey discovered that 48% of employees had their salary frozen last year, whilst 5% received a pay cut. Furthermore, only 18% of those surveyed received a cash bonus in 2011.

Only 24% of public sector employees received a pay rise last year, compared to 51% of those in the private sector. 70% of those in the public sector were subjected to a pay freeze last year, as were 42% of private sector employees. 45% of employees in the not-for-profit sector got a salary increase last year, whilst 48% saw no change in their rate of pay.

Probably, not surprisingly, employees who did not get a pay rise in 2011 registered a net satisfaction score of -41.

Net satisfaction amongst those who were on the receiving end of a payroll increase remains positive at +56, although that was slightly down on the +61 registered at the end of 2010.

When it came to bonus satisfaction, 37% said the extra money reflected how well they had performed, 31% believed it was a reflection on the profits of the company and 18% thought their bonus rewarded team effort.

Charles Cotton, the CIPD’s rewards advisor, said employers must put more effort into explaining the way they reward employee performance. If they do not do so, employee motivation could drop and productivity decline, placing the company in a vicious circle that might hinder performance and hope of an economic recovery.

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