Employees’ satisfaction with pay rises and bonuses decreased in 2011, according to research by the Chartered Institute of Personnel and Development (CIPD).
The annual Employee attitudes to pay survey found that the net satisfaction score among those who received a pay rise was 56 in 2011, down from the 61 recorded in 2010 and 62 in 2009.
Just over a quarter of employees (27%) felt their pay rise reflected the state of the economy; while 19% said it reflected how well they had performed at work. A further 19% said it was more than they received last year.
The main reasons cited by employees for dissatisfaction are: it did not keep pace with the increases in the cost of living (up from 53% in 2010 to 63% in 2011); it did not reflect how well they performed at work (22%); and their pay is below what they could get elsewhere for doing the same job (18%).
The majority of employees have seen their pay either frozen (48%) or cut (5%), and just 18% received a cash bonus.
The survey found that since 2008, the proportion of employees receiving a pay rise fell from 67% to 45% in 2011, down slightly on the 46% recorded in 2010.
Just over half (51%) of private sector employees have had a pay rise since the start of 2011, 45% in the voluntary sector, but just 24% in the public sector.
The proportion of employees who have been subject to a pay freeze has increased from 24% in 2008 to 48% in 2011.
Public sector employees (70%) are most likely to have seen their pay frozen in 2011, followed by those in the voluntary sector (48%) and the private sector (42%). In addition, 5% of employees saw their pay cut.
Charles Cotton, rewards adviser at the CIPD, said: “It is encouraging to see employees recognise the impact the state of the economy has on their employers’ ability to reward them with pay rises and cash bonuses.
“However, one of the main reasons cited for dissatisfaction with a pay rise was feeling that it did not reflect how well the individual had performed.
“Employers must try harder to explain what performance the organisation values and how it will reward and recognise this.
“If not, levels of motivation and productivity could fall, perpetuating a vicious circle that could hold back both organisational performance and wider hopes of economic recovery.”
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