The majority of company staff saw their pay packets remain static or shrink in 2011.

The majority of company staff saw their pay packets remain static or shrink in 2011.

Some 48 per cent say that their pay was frozen and 5 per cent suffered a pay cut, with just 18 per cent receiving a cash bonus, according to the annual Employee Attitudes to Pay survey by the Chartered Institute of Personnel and Development (CIPD).

Around half (51 per cent) of private sector employees have had a pay rise since the start of 2011 compared to 45 per cent in the not-for-profit sector, but just 24 per cent of those in the public sector have received an increase.

Public sector employees (70 per cent) are most likely to have seen their pay frozen in 2011, followed by those in the not-for-profit sector (48 per cent) and the private sector (42 per cent).

As a consequence of stagnant pay, the net satisfaction score among those who received a pay freeze is -41, down on the -26 posted in 2010 and the -23 in 2009.

Among those who did receive a pay rise in 2011, satisfaction levels have dipped slightly since last year, but net satisfaction remains strongly positive (+56 in 2011 compared to +61 in 2010).

The most common explanations for bonus satisfaction are: it reflected how well I had performed at work (37 per cent); it reflected how much money the employer has made (31 per cent); and it reflected how well my team had performed at work (18 per cent).

Charles Cotton, rewards advisor at the CIPD, says that employers must try harder to explain how they will reward and recognise employee performance. ‘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,’ he adds.

See also: Rewards for responsible firms