37% see a clear link between their pay and performance

iain nichols pay and performance

More than a third (37%) of employee respondents working in the UK see a clear link between their pay and performance, according to research by Willis Towers Watson.

Its 2016 Willis Towers Watson global workforce study, which surveyed 36,000 full-time employees working in large and midsize organisations across 29 global markets, also found that 40% of respondents feel their manager makes fair decisions on how their performance links to pay decisions, and 46% believe their organisation does a good job of explaining its pay programmes.

In addition, according to its 2016 Willis Towers Watson talent management and rewards survey, which surveyed 2,004 organisations worldwide, 54% of UK employer respondents think employees understand how their base pay is determined and 36% believe their base pay programme is well executed. More than half (58%) of UK employer respondents feel that employee performance is fairly reflected in pay decisions.

Willis Towers Watson also confirms that pay growth will reduce in 2017, according to its Willis Towers Watson salary budget planning report, which collected 13,250 sets of responses from organisations across 139 countries worldwide.

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Tom Hellier, Great Britain (GB) rewards practice lead at Willis Towers Watson, said: “The most recent pay data points to no significant wage growth in the last year. Without the current flexibility to expand the pay pot, employers are missing a trick by not using the resources they do have when it comes to rewarding employees more strategically. Instead, they seem to be spreading what they have more evenly than ever in an attempt to keep everyone happy, rather than rewarding their best performers for going the extra mile.”

Iain Nichols (pictured), head of data services GB at Towers Watson, added: “Our latest salary budget figures show that while real pay growth is declining in the UK, employers are likely to have their hands tied for pay review budgets for a while yet. So, they should be targeting their spend on high-performing employees as their European peers are already doing it. It is important for [organisations] to get this right as pay will always be a key weapon in the war on talent.”