A majority of companies fail to measure the contribution pay and benefit packages can add to business leaving many HR and reward professionals unable to fully justify increase spend or changes to benefit packages, according to the Chartered Institute of Personnel and Development’s The Annual Reward Survey 2007.

It found that only one third of businesses have a reward strategy and just 55% of these measure its effectiveness. Only 23% of these companies link measurement to business data leaving most unable to show how their reward strategy achieves one of its main objectives to support business goals.

Charles Cotton, CIPD Pay and Benefits Adviser, says: “Organisations could make the wrong decision and waste time and money on pay and benefits if they fail to measure the effectiveness of the reward strategy properly. HR and reward professionals should investigate measures, such as customer satisfaction and line manager feedback, to show the real value such packages can have on all areas of the business.”