The Chartered Institute of Personnel and Development (CIPD) has announced that two in every five employers fail to adequately explain, if at all, the reasons behind their decisions to raise, cut or freeze employee's pay.

As many of you will be all too aware the last few years have meant that more people than usual in contemporary times have suffered a pay freeze during the last year. The CIPD's survey on Attitudes to Pay revealed that the amount of people who suffered a pay freeze in 2011 was the most since 2008.


Even more worringly was the fact that even those who were unaffected by pay freezes and even those who did get a rise in their income have still reported increased dissatisfaction in their roles. The survey found that where an increase in pay was explained to the employee this positively affected how they felt about their work and role. One can imagine how this might be the case where, for example, having reached a certain level in training or achieved particular outcomes, you have become eligible for a pay increase.

The provision of information has long been believed to be a central feature in the maintenance of good HR management, whatever the aspect the information relates too. Generally speaking, people are happier if they know what's going on. In times of recession where employers need their staff to keep up the good work and to bear with them by freezing their pay, they need to communicate this message to them directly. Interaction between the employer and their employees provides an opportunity for an exchange of information and helps to empower employees or make them feel more in control of their futures.

The survey showed that people who were to receive a pay cut were most likely to receive an explanation as to why, followed by those receiving a rise and finally those who had their pay frozen. The most common reason for these decisions tended to be the general state of the economy, which had caused increased costs in terms of materials in manufacturing for example. However, even when an explanation was given, people were less satisfied in 2011 with that explanation than they had been the previous year. This finding upholds the fact that where possible communication over why pay is changing or not, as the case may be, should endeavour to be as interactive as possible as opposed to a standardised letter for example. Since the economy has been in a bad state for the previous few years employees may wish to have a more detailed answer as to why they will not be receiving a rise in their pay and as such may have specific questions to ask. By taking the time to listen and to try to answer these questions an employee can demonstrate that they care. This will help improve general job satisfaction also.

The figures showed a decrease in the amount of people getting a pay rise in 2011 compared to 2010 and more people received pay cuts than the previous year also. Of those surveyed, only 19 percent felt that a pay rise was as a result to their good performance. This is something which employers should change. And whilst it's always nicer to give out the good news, giving out the not so good in a fuller, more interactive way could also help improve employee motivation during these difficult times of austerity.

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