Onrec logo The Online Recruitment Resource

Comment from Xactly: FTSE 100 bosses earn average of £5.5m a year

Tom Castley, VP of Xactly EMEA:

“The grumblings that executive pay in the UK is too high has been talked about for some time now, and the fact that this figure has increased by a further 10% over the past year is going to cause further frustration.  Previous research has shown that 60% of employees are demotivated by high level of executive pay and, at a time where productivity is an issue in the UK, more needs to be done to rectify this problem.

“However, it isn’t only the sheer size of the executive’s pay packet that’s discouraging, it’s the gap between the total salary of the boss versus the workers, and is particularly true when it comes to bonuses. Sizeable rewards for chief executives are particularly demotivational for workers when there isn’t a bonus scheme in place for those at lower levels of the organisation, as is the case in many businesses in the UK.

“If companies really want to take steps to engage its staff, levels of pay must reflect performance, no matter their position. If there is a clear and visible link between achievements and compensation, then pay can be a great motivational lever. If employees feel that both they and their bosses are being fairly rewarded, then the high pay packet at the top won’t be so disheartening. It’s not that companies need to throw money at staff to improve motivation; smart bonus schemes encourage great performances - and productive businesses.”