Profit-linked pay `fails to motivate'
Monday 02 December 1996
Even where the value of such schemes was recognised by companies on an intellectual level, few of them communicated the benefits to staff before implementation.
"Fewer still attempt to integrate financial participation into a wider company philosophy or strategic process," says the report, sponsored by Bacon & Woodrow, the pay and benefits consultants.
The study, by Rachel Sloan and Niki Jackson, two MBA students at City University in London, comes after Kenneth Clarke, the Chancellor, announced plans in last week's Budget to phase out profit-related pay (PRP) within the next four years.
The survey, carried out before Mr Clarke's announcement, shows that about 60 per cent of companies in the FTSE 100 share index will be affected by the abolition of PRP.
The report says: "All of the companies interviewed in this research recognise that PRP is a Government-backed fiddle and as long as it available most do not see why they should not take advantage of it."
Not one company in the survey gave motivation of employees as the reason for introducing PRP.
Ms Sloan said yesterday: "If the UK continues to encourage capital gain over Social Charter initiatives to motivate people at work, companies need to pay more than lip service to the schemes they initiate.
Employee share schemes also come in for some criticism by the authors. Approved profit-sharing schemes were used by about 58 per cent of companies in the report, while save-as-you-earn schemes were used by 93 per cent of firms.
Although many firms introduced such schemes because it was felt that employee ownership was a "good thing", no reason was given for such a belief.
Richard Greenhill, a partner in Bacon & Woodrow said: "Compared with most other countries, there is a lot of equity share participation in the UK. It is often the case that even though companies are doing the right thing, they are not aware of why they are doing it."
- 1 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 3 US? China? India? The 10 biggest economies in 2030 will be...
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...