Only a third of employees see a clear link between their pay and performance, according to research.

Only a third of employees see a clear link between their pay and performance, according to research.

The study, which gathered responses from more than 36,000 employees across a range of industries, also revealed that only two in five employees felt their managers made fair decisions linking performance to pay. Less than half said their organisation clearly explained its reward programmes.

Only 58% of UK companies thought employee performance was being fairly reflected in pay decisions.

The findings follow various warnings that wages are becoming increasingly squeezed. The CIPD revealed in August that pay growth was anticipated to be just 1% over the next 12 months -the lowest expectations have been, in three-and-a-half years.

Employers face a challenging balancing act to manage or deal with poor salary budgets and few incentives, but also to retain and attract talent. Managers must become more strategic in rewarding good performance – Linking pay to performance and rewarding correct behaviours.