However, although satisfaction levels dipped even for those who did receive a pay rise, net satisfaction remained strongly positive, +56 in 2011 compared to +61 in 2010.

The CIPD said most of the employees who felt satisfied with their pay rises were so because it reflected the state of the economy, with 19% saying it reflected how well they worked.

Charles Cotton, rewards advisor at the CIPD, said: "It's encouraging to see that employees recognise the impact the state of the economy has on their employers' ability to reward them with pay rises and cash bonuses.

"However, one of the main reasons cited for dissatisfaction with a pay rise was feeling that it didn't reflect how well the individual had performed. Employers must try harder to explain what performance the organisation values and how it will reward and recognise this. If not, levels of motivation and productivity could fall, perpetuating a vicious circle that could hold back both organisational performance and wider hopes of economic recovery."

Natalie Thornhill