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Employers resist pay rises - 15-02-2005
UK employers must involve line managers in pay and benefit strategies in order to keep control of wage increases and to ensure money is not being wasted, according to the Chartered Institute of Personnel and development (CIPD).

A third of organisations have a separate reward function and this is becoming more important as organisations attempt to recruit, retain and motivate staff in a highly competitive environment, according to Institutes' latest comprehensive annual survey of pay and benefit practices.

But many employers may not be benefiting fully from their new reward schemes because the message is not reaching the rank and file.

Effective pay and benefit packages depend on the involvement of line managers with 60% of organisations expecting line managers to communicate the reward strategy, according to the Reward management survey 2005. But less than a third of organisations actually involve line managers in developing the reward strategy.

There also appears to be a continuing shift to individualised, and away from collectivist, approaches to pay. The majority of organisations continue to involve HR, board members and senior management in determining pay and benefit strategies. However, trade union input to pay and benefit strategies appears to be declining.

Charles Cotton, CIPD Reward Adviser, says, "Reward is becoming more and more important in helping employers compete in the war for talent, as unemployment is so low. Many employers are recognising that non-financial rewards, such as family friendly work policies, are just as important as wages and bonuses. They help to attract employees from a wider pool and avoid unaffordable pay increases. But organisations must think about how they communicate these benefit programmes to staff and ensure the different elements of total reward, including non-financial, are integrated.

Staff must fully understand and appreciate the rewards they are offered to realise a full return on the investment"

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