Companies must aim to reward their employees’ achievements fairly or risk an unmotivated workforce, says the CIPD.

According to a survey by the Chartered Institute of Professional Development (CIPD), staff are more enthusiastic and engaged if they feel their skills and efforts are justly recognised by their employer. Despite this, only 41% of organisations questioned treat fairness as an objective of their reward strategy.

The CIPD argues that salary and reward policies are crucial to achieving business objectives, warning that if staff believe these to be unfair, the relationship with employees can be damaged.

The people management body advises companies to monitor the reward system regularly, maintain objectivity in determining reward procedures, and communicate well with staff about benefit strategies.

Dianah Worman, CIPD Diversity Adviser, said: “Employers should begin from the principal that all individuals, not just women compared with men, should receive equal pay for equal work.

“It is in the self interest of employers to explore the underlying issues, such as poor diversity training, weak performance management systems and biased appraisal processes in order to create a culture based on fairness, as this contributes to better business performance.”

The CIPD annual reward conference 2006 takes place at Olympia, on the 7-9 February 2006.