Growing gap between boardroom and workforce pay demotivating staff, says CIPD

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Fat cat salaries are starting to cause problems as employees note the growing salary gap
Fat cat salaries are starting to cause problems as employees note the growing salary gap

The upward momentum of chief executive pay and reward in the UK’s largest organisations has reached crisis point, the CIPD is warning. Pay levels do not clearly match personal performance or business outcomes, the CIPD says, and this is having a significant impact on the motivation levels of the workforce.

The research, which includes a survey of employee attitudes on CEO pay, explores the behavioural factors that are causing executive pay to spiral upwards and the impact that this is having on the workforce.“The growing disparity between pay at the high and lower ends of the pay scale is leading to a real sense of unfairness, which is impacting on employees’ motivation at work” commented Charles Cotton, CIPD Reward Adviser.

High levels 

Seven in ten (71 percent) of employees surveyed said that they believed CEO pay in the UK was ‘too’ or ‘far too’ high, while six in ten said that the high level of CEO pay in the UK demotivates them at work.

When it came to their own CEO’s pay, 45 percent thought that it was too high, while only four percent said that they thought their CEO’s pay was too low.

“The message from employees to CEOs is clear: ‘the more you take, the less we’ll give’. At a time when the average employee has seen their salary increase by just a few percentage points over the last several years, we need to take a serious look at the issue of top executive reward,” Cotton concluded.

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