Standard pay increases are becoming less popular among employers trying to get the competitive edge, research suggests.
A study from the Confederation of British Industry (CBI) and the Chartered Institute of Personnel and Development (CIPD) shows widespread interest among private sector employers for reward-based pay increases.
The CIPD found that 46 per cent of businesses were choosing this system, while the CBI found that 27 per cent of employers thought rewards such as performance-related pay gave them the competitive advantage.
CBI senior policy adviser Marion Seguret said some 28 per cent thought it would be a key influence within five years.
"This means they do not set standard increases, preferring to make use of performance review processes and to benchmark locally," she added.
However Charles Cotton, CIPD's employment conditions and reward adviser, said the trend could leave employees "confused, demotivated and in the dark".
He suggested communication filtered down the maganement structure would help to allay fears.
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