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02 Jan 2018

Survey finds greater openness about reward management

Businesses are increasingly willing to be open with staff about pay processes and decisions, according to research by the CIPD, the professional body for HR and people development.

Its latest Reward Management Survey, which included more than 700 employers, suggests that pay management is entering a new era of transparency and openness.

More than two-thirds (68%) of employers claimed they are open about how pay levels and pay increases are set, with almost a third (31%) favouring ‘great´ transparency.

In contrast, the previous Reward Management Survey in 2015 found that only half of respondents were in favour of pay transparency unless compelled by legislation.

In the latest report, almost three in four (71%) employers said they are open about how pay rises have been calculated and more than half (59%) are transparent about the size of wage increases awarded as a result of those processes. Very large organisations (10,000+ employees) are most likely to be open on pay.

According to the CIPD, this openness — particularly amongst larger employers — may be partly driven by the introduction of gender pay gap reporting, which is now a requirement of organisations with more than 250 employees.

Charles Cotton, senior reward and performance adviser at the CIPD, commented: “While we´re still some way off from seeing full disclosure on pay and reward, there are strong indications that employers are increasingly willing to be open about the processes behind their pay decisions, and in some instances, the outcome of these.

“This trend is part of a much wider shift in business accountability which we´re seeing through gender pay gap reporting and calls for greater transparency on executive pay.

“Fairness, inclusion and equal opportunity are at the heart of good work and increased transparency gives organisations the chance to explore their pay practices, as well as shed light on wider workforce issues.”

The survey also found significant growth in the use of gainsharing, a group reward scheme in which employees receive a bonus linked to productivity improvements or a cut in production costs. This was in use by 41% of organisations in 2017, compared to 20% in 2015.

This increase suggests that employers are becoming more creative in some areas of reward in an effort to improve their organisation´s performance, the CIPD said.

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