Budget 2014 – What it means for Employees
Mark Beatson, Chief Economist, CIPD: “Business will only reap the full economic benefits of investment in plant and machinery if they also invest in the training, people development and organisational change to ensure new technology is used effectively. While there was an extension of the current arrangements to increase the number of Apprenticeships, we didn’t see a sufficient level of ambition in raising the UK’s skills capabilities. We will continue to press the case for a fundamental review of UK skills policy, together with a new focus on the workplace, the nature of jobs for the future, and how skills are being utilised.”
Previously, the CIPD has urged the government to improve UK productivity as a sustainable way to boost the economy in the longer term. But Beatson said: “Productivity was not the focus of the chancellor’s Budget today.” Encouraging businesses to do what they do but in an engaging manner could have been one way to increase productivity.
Recent research reveals that just one in ten people feel more positive about their job as a result of the improving economy. This sentiment has a significant impact on motivation levels within a business – an issue which many organisations should be planning to address.
How can businesses boost engagement levels? Well, a quick fix isn’t the answer. Many businesses fall into the quick fix trap, planning only for the short term. When rewarding staff, this is no exception. A short-term reward scheme serves to provide an immediate boost for staff, but will not deliver results in the long run. Companies should be wary of taking a short term view instead of considering activity and objectives over a longer period.
Why? According to Edward Beale, chief executive of The City Group PLC, “the challenge is to design something that not only motivates the person but doesn’t reward failure and incentivises them to do the right things, whatever the individual circumstances of the company. Usually, those right things are about growing long-term value and, in those circumstances, it makes sense for incentives to be weighted toward the achievement of long-term value.”