Businesses leaving employees in the dark about rewards and pay
Companies failing to communicate with employees about their remuneration package, including salaries and benefits, are 'wasting' their money and failing to reap the benefits, research carried out by the Chartered Institute of Personnel and Development (CIPD) has claimed.
According to the business group, while most employers are aware of the advantages of attracting and retaining employees through competitive salaries and benefits, many workers do not understand the value of what they are getting.
More than a third of companies plan to increase spending on employee benefits in 2012, although few (18 per cent) supply a summary known as 'total reward statements' to staff.
The majority of companies do not adopt a transparent approach to communicating pay scales, it said, as well as potential benefits and allowances, job evaluations, performance-related pay schemes and how pay decisions are made in the work place. At present, businesses typically approach pay as a private matter; only providing information when required to under legislation.
Rewards adviser at the CIPD, Charles Cotton said that employers who do not communicate effectively with their staff about rewards risk losing valuable members of staff to competing firms offering the same incentives. Two thirds of organisations in the UK use performance related rewards and benefits such as training and childcare vouchers.
A large number of firms - 8 in 10 - also fail to offer financial information to educate employees on the value of their pensions, despite nine out of ten firms contributing to an employee pension scheme.
Charles Cotton added: "As we embark upon the biggest shake up to pensions since the state pension was created, employers will have a duty to communicate with employees about these changes and how they could benefit from saving for their retirement."
"What's more, if employers apply that duty of care to their entire reward strategy, by improving employee understanding and awareness around the value of the entire breadth of benefits they offer, employers are likely to reap the benefits in terms of recruitment, retention, engagement and productivity."