Employee motivation: Pay levels will not rise until 2012, experts warn

Date: 18/02/2011

Staff looking for an increase in pay this year will be disappointed as economists have predicted wages will not increase until 2012, leading to low employee motivation in UK workforces.

According to the Ernst & Young ITEM Club, there will be "little respite" for workers' pay in 2011.

Andrew Goodwin, senior economic advisor to the ITEM Club, attributed the stagnant pay situation to the fact that large sections of the public workforce will soon experience a two-year pay freeze, and the private sector will not be likely to increase pay while the UK has such high unemployment levels.

"However, as the recovery gains greater traction, we should see pay settlements gradually begin to pick up, and by the first half of next year we would expect to see wages rising again in real terms," Mr Goodwin added.

With businesses struggling to increase pay, employee motivation and performance could be boosted by offering incentives and recognition.

Recently National Grid announced that it was offering staff pre-loaded shopping cards for use at supermarkets.

Posted by Elizabeth Mewes 

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