Is basing remuneration on CPI really fair?

Basing remuneration on CPI only allows pay inequity to become increasingly entrenched in an organisation

BY Jodi Walters 20 Aug 2022

Fair remuneration and salary increases can be tricky to navigate. A whitepaper published by HRD in partnership with Strategic Pay examines the debate around salary increases being based on CPI and why this may not be the best idea.

Download the full FREE whitepaper here: Are you paying your top employees right?

Most organisations want to pay their staff fairly and equitably. For a lot of organisations, the application of a percentage increase based on CPI is the best course of action. However, the whitepaper demonstrates this option in fact, only allows inequity to become increasingly entrenched in the organisation.

Instead, organisations should have a stated remuneration policy in place. This provides a solid foundation for remuneration and reward and gives employees reassurance around pay determination aspects like fairness and equity. Having a solid understanding of rewards and remuneration is critical to retaining top talent.

A policy provides a common starting point for organisations and employees and articulates what an organisation wants to achieve and links in with the wider business strategy.

Linking base pay to performance outcomes means you are rewarding employees based on the successful achievement of the requirements of their role. Implementing this requires solid systems and procedures as well as regular opportunities for employees to demonstrate their achievements.

Consider what is right for your organisation and make sure to reward employees with both financial and non-financial rewards.

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