Reward and pay are important factors in the process of attracting, retaining and engaging employees. There's a range of options available for organisations to reward their staff and recognise their contribution, each with their own benefits and risks, but the most effective reward packages will be aligned with the business needs and reflect the organisation’s purpose and performance.

This factsheet explores the purpose of pay and reward and how employee responses may vary depending on different contexts and circumstances. It introduces pay structures and levels, the considerations surrounding pay awards and the factors affecting pay progression. It also describes variable pay – from cash bonuses to incentives – as well as outlining some UK legal issues such as equal pay, the national minimum wage, national living wage and executive reward. Finally, it outlines the role of employee benefits, non-financial rewards and total reward.

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This factsheet was last updated by Charles Cotton.

Charles Cotton

Charles Cotton: Performance and Reward Adviser

Charles directs the CIPD's performance and reward research agenda. He has recently led research into: how employers can help improve their employees’ understanding of their personal finances; how front line managers make and communicate reward decisions to their employees; how employers manage the risks around reward; how private sector employers can build the business case for workplace pensions; how employees form their attitudes to pay; and how the annual pay review process can become more strategic. 

He is also responsible for the CIPD’s public policy reward work and has given evidence to select committees on banking pay, redundancy awards as well as responding to various consultations, such as on pensions, retirement and MPs’ expenses.


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