Bonuses help retain talented staff

Banks which have survived the credit crunch "have a much stronger case" to offer employee rewards, according to one global management consulting firm.

Royal Bank of Scotland and Lloyds Banking Group have revealed plans to reward middle managers despite receiving bailouts from the taxpayer.

Following the announcement that banks will offer bonuses to staff as profits start to rise, experts suggest that financial remuneration is often necessary for quality employee retention.

A study published by Hay Group found that the average UK pay rise is expected to be under 1.5 per cent this year – among the lowest salary raises on offer anywhere in the world.

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Simon Garret, director of UK executive reward at Hay Group, said: "Having talented people within those organisations, who are swiftly motivated to generate profits, usually means you have to pay them a bonus."

Results of a recent poll carried out by Monster indicated that 44 per cent of employees do not expect a pay rise this year.