REWARD MANAGEMENT
Merit awards still dominates pay setting in private sector
Reports of the demise of merit pay have been much exaggerated. It remains the norm rather than the exception across a large swathe of the private sector, according to figures gathered by the Confederation of British Industry, the UK's main employers' organisation, and human resources consultancy William M Mercer.
The 673-company survey found that merit pay was the single most popular type of programme used to determine pay in the UK. As many as 63% of private sector employers operate formal assessments of individual performance to set pay.
Nearly half of organisations (48%) had a general link between pay and company performance or profit.
Employers’ pay mechanisms
|
| Per cent of respondents |
| Formal assessment of individual performance | 63% |
| General link to company performance/profit | 48% |
| Informal assessment of individual performance | 43% |
| Direct link to company performance/profit | 42% |
| Formal assessment of team performance | 18% |
| Informal assessment of team performance | 13% |
Source: Employment Trends Survey 2001: Measuring flexibility in the labour market, Confederation of British Industry and William M Mercer.
Survey details
Title: Employment Trends Survey 2001: Measuring flexibility in the labour market, Confederation of British Industry and William M Mercer.
Methodology: Survey sent to 4,800 private sector employers in March and April 2001.
Survey sample: Information supplied by 673 companies — a response rate of 14% — covering 2.8 million employees. Two-fifths of participants employed fewer than 200 employees and 13% had more than 5,000 employees.
Business sectors: Manufacturing organisations represent 28% of respondents, with 59% in services.
Availability: Contact the publications department at the Confederation of British Industry in London, tel: 020 7395 8071.
Want to know more?
If you have any questions or comments on the report please contact:
Jamie Bell, CBI, Centre Point, London WC1A 1DU, tel: 0207 395 8242 or email: jamie.bell@cbi.org.uk. Browse the Confederation of British Industry web site at www.cbi.org.uk
Mark Edelsten, William M Mercer Limited, Dexter House, 2 Royal Mint Court, London EC3N 4NA, tel: 0207 488 4949 or email: mark.edelsten@uk.wmmercer.com.Jump to William M Mercer's web site at www.wmmercer.com.