Published recently in the People Management magazine issues were highlighted in and with the NHS Agenda for Change pay contract. The new pay system for NHS staff failed to deliver cost saving or an increase in productivity, according to the National Audit Office.
A report by the spending watchdog said that productivity in the NHS continued to fall despite the introduction of the new Agenda for Change pay contract.
It amazes me that many HR professionals still believe new pay changes will increase employees motivation/productivity. Whether we like it or not most employees believe that they are due a pay increase year on year, the main argument being down to inflation. Pay raises also show that the business is in a strong position.
We are currently in a difficult situation with the state of the economy and I believe this makes certain aspects of HR easier. It would be quite brutal for an employer to tell its employees that having a job during the recession is a motivational factor but in honesty it would be close to the truth. Personally, I believe that at a time when businesses are spending money more wisely it would be better to use this basic approach and build on it to develop a true motivational scheme.
Employees have a vast range of needs and if an employer wants to work with the employee then they will motivate them without spending money.