The recent Global Workforce Study by consulting firm Towers Watson shows that even though pay is seen by both employees and employers as a key driver to attract and retain talent, clear linkages between performance and pay are still missing in payment schemes of UK businesses.
Global Workforce Study
The Global Workforce Study is a research executed by consulting firm Towers Watson that provides a view into attitudes and concerns of employees around the world. The 2014 edition of the survey was part of a larger research initiative that focussed on perspectives of employers and employees on emerging trends and issues that shape the global workplace. For the survey 32,000 full-time employees working in large and midsize organisations across a range of industries in 26 markets around the globe were questioned.
Performance based pay
The study focuses on the reasons for employees to join or stay at a company in 2014, and it can be concluded that the key driver for employees is base pay in both cases. Employers rank base pay number two for attracting professionals and also number one for retaining their employees. Even though, employers recognise pay as a key driver, the research shows that the link between pay and performance is still lacking in the UK, and that UK employers are going against best practices in providing compensation programmes for their top performing employees. Only 39% of the employees surveyed said they see a clear link between their performance and their pay, and less than half said they believe their company adequately rewards outstanding professionals. Employers surveyed also indicated a lack of performance based pay, and only 45% said that the performance of its employees was reflected in its pay decisions.
Towers Watson suggests that companies should do more to distribute compensation resources, if they want to attract and retain top performing professionals. “There is no escaping the fact that pay really matters to employees when making decisions about whether to join or stay with a company. Without the current flexibility to expand the pay pot, employers are missing a trick by not using the resources they do have more strategically when it comes to rewarding employees. 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,” says Carole Hathaway, Global Leader of the firm’s Rewards Practice.