Pay and benefits are important in attracting, retaining and engaging employees. A range of options is available to reward workers and recognise their contribution, each with their own opportunities and risks. The most effective reward packages meets the needs of its people, the business, and the organisation’s purpose, culture and performance, in a fair and responsible way.

This factsheet explores the purpose of reward and how employee responses may vary depending on different contexts. It introduces pay structures and levels, considerations surrounding pay awards and factors affecting pay progression. It also describes variable pay and outlines the UK law around pay. Finally, it looks at the role of employee benefits, non-financial rewards and total reward.

Explore our viewpoint on low pay and financial wellbeing and executive pay in more detail, along with actions for government and recommendations for employers.

This factsheet was last updated by Charles Cotton: Senior Performance and Reward Adviser, CIPD

Charles directs CIPD’s research agenda and public policy on performance and reward. He speaks for CIPD at government consultations on topics such as, pensions, retirement, CEO remuneration, low pay and employee tax.  

More on this topic

Policy engagement
Informing the UK’s National Living Wage for 2024

Read the CIPD’s response to the Low Pay Commission’s 2023 consultation

Labour Market Outlook

This quarterly survey is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions

Explore our other factsheets

Talent management

Understand the benefits of talent management, and key features of a talent management strategy

Business partnering

Learn why organisations use business partnering, how it’s implemented and how it can shape successful relationships across the organisation.

HR outsourcing

An overview of HR outsourcing, its use within organisations and its alternatives

Learning theories that impact on design

Learn about the influence of theories on how people learn and the shift away from simplistic learning styles theory