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HR Information

Research reveals widening gap between pay and performance

New research has revealed that UK companies are failing to differentiate pay sufficiently for top-performing employees.

The findings demonstrate that there is a clear opportunity for firms to better allocate their resources to attract, motivate and retain their best employees as the state of the market creates more competition for talent.

Employers in the UK are falling short in how they deliver pay programmes including base salary and bonuses, even though salary remains the foremost consideration for workers in the UK when deciding to join or stay with a company.

Employee attitudes

The 2014 Towers Watson Global Workforce study shows only a small number of workers in the UK (39 per cent) see a clear link between their pay and performance.

Less than half (43 per cent) of employees believe their employer adequately rewards individuals for break-through ideas, while only 44 per cent are satisfied with their company's attempts to explain its pay programmes.

Carole Hathaway, Global Leader of Towers Watson’s Rewards practice, said many forecasts are not predicting significant growth in earnings until at least spring 2015.

"Without the current flexibility to expand the pay pot, employers are missing a trick by not using the resources they do have more strategically when it comes to rewarding employees," she added. 

"Instead, they seem to be spreading what they have more evenly than ever in an attempt to keep everyone happy, rather than rewarding their best performers for going the extra mile."

Employer attitudes

Employers give themselves middle-of-the-road ratings on their effectiveness in delivering pay programmes, the study found.

Less than half (42 per cent) said they think their employees understand how their pay base is determined, while only 45 per cent of UK companies were of the opinion that employee performance was fairly reflected in pay decisions.

Only a third (36 per cent) of UK employers said they think their base pay programme is well-executed.

A separate survey by the organisation revealed that pay growth will remain much the same during the next year, with employers in the UK planning to maintain pay rises at an average of three per cent into 2015.

Wage growth in other countries in Western Europe – including France, Germany, Italy, Switzerland and Spain – is outstripping inflation to a greater degree than in the UK, while the growth of wages is even better in developing economies.

In other regions in Europe, the Middle East and Africa, more employers are differentiating pay for high performers than in the UK.

Ms Hathaway commented that it is surprising that a third of employers are awarding a bonus to those employees with a low performance rating, thus hampering their ability to reward top performance as part of their pay performance efforts.

Paul Richards, head of Towers Watson's Data Services EMEA, said firms should be focusing their efforts on rewarding their high-performing employees as this will help them to attract and retain talent.

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HR Information

Collaboration with universities benefits employers

Collaboration between businesses and universities is producing a wide range of benefits and boosting students' prospects.

Organisations involved in these partnerships gain access to new talent, better productivity and improved competitiveness – both in the UK and globally, according to a report, which has been published by the UK Commission for Employment and Skills (UKCES).

'Forging Futures: Building higher level skills through university and employer collaboration' reveals that universities also benefit, as they are able to provide relevant, up-to-date courses, diversify their offer and enhance employment prospects for their students.

Professor John Coyne, vice-chancellor of the University of Derby and UKCES commissioner, described the trend for more partnerships as a "quiet revolution" in the tertiary education sector.

"There is no one-size-fits-all solution for people to gain the skills they need. Work-based courses are an alternative way for young people and experienced workers to gain high-level skills, and from the report it’s clear there is a lot of great work taking place," he said.

Mr Coyne added that more needs to be done to support these partnerships, so that they become accepted as a mainstream alternative to a traditional degree.

Improving competitiveness and productivity

The UK's economy is currently in a state of transition and the proportion of jobs requiring high-level skills is expected to increase.

Collaborating with universities enables companies to meet these evolving needs, particularly in cases where traditional education and training are insufficient to do so. 

In addition, employers often benefit when the training goes beyond their specific sector – for instance, they gain when collaborations lead to sustained growth in supply chains.

Putting in place pathways to industry

Clear routes into employment linking education and training opportunities to necessary skills can enable employers to develop and maintain a skilled workforce. Industry-recognised qualifications, developed with universities, can lead to better movement through the labour market.

Attracting new talent

This is particularly important when a certain sector is expecting significant employment growth (expansion demand) or where it is necessary to replace a large number of staff who are planning to retire (replacement demand).

Working with universities can enable industries to overcome barriers to attracting new recruits, giving them access to a pool of talent with theoretical and practical experience, high levels of knowledge and a good understanding of work culture and employability.

Retaining and training existing staff

Training and staff retention can be improved through collaborative efforts. Staff retention can be boosted as employees are able to develop new skills and take on new challenges, while recognising that their employer is willing to invest in their development.

Organisations are able to integrate the skills of their workforce with long-term goals and this could allow them to change the structure of their organisations, their recruitment policies and their approach to continuing professional development.

Employers are being encouraged to think about which of their skills needs would benefit from collaboration with a university. They should then consider contacting institutions with known expertise in the sector to begin discussions.

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Life Sciences

Is there a biology gender divide?

Addressing the persistent gender gap in science, technology, engineering and maths (STEM) subjects has proven to be one of the most pressing academic concerns in recent years.

Biology has been seen as an area which is not affected by gender inequality, as it is the one STEM subject in which female candidates have traditionally outnumbered male ones. More than 60 per cent are female and about half of biosciences graduate students are women.

However, a new research paper published in the US casts doubt on the notion that the gap has totally disappeared, revealing evidence of inequality even in biology classrooms.

Unequal participation

Researchers at Arizona State University (ASU) and University of Washington found evidence of gender-based gaps in both achievement and class participation during a study of introductory college-level biology courses

"Often, gender differences are assumed to be present only in fields where males outnumber females and where there is a strong emphasis on math," said Sara Brownell, assistant professor with ASU's School of Life Sciences. 

"But we are seeing it in undergraduate biology classrooms that do not focus on maths – where females make up about 60 percent of the class – indicating that this could potentially be a much more systemic problem. It's likely this is not unique to physics or biology, but rather true of most undergraduate classrooms."

Some 23 classes were studied at a research one (R1) university over a two-year period. Comprising mostly sophomores and biology majors, they were generally taught by two instructors each. More than 60 per cent of the 5,000 students enrolled on the courses were female.

Studies of exam performance and class participation revealed that female's exam scores were on average 2.8 percent lower than those of male students.

There was also a gap in participation rates, with 63 per cent of males on average speaking up when asked to volunteer responses to questions – even though they made up just 40 per cent of the classroom.

Bridging the gap

According to co-author Sarah Eddy, this can create problems because such classes are the first opportunity many people have to interact with professionals and peers and build up their confidence levels. Unequal participation rates mean women have fewer chances to succeed.

Fortunately, however, the researchers have proposed strategies they say could be used to bridge the divide.

They recommend using a pre-sorted list of student names to randomly call on students, rather than allowing them to raise their hands. They believe this idea may meet with some initial resistance but would boost equality in the classroom.

"In order to solve the problem, instructors must be aware that it even exists," Professor Brownell pointed out. 

She argued that it is now important to find out the causes of the inequality and then develop new strategies that could combat it.