Employers would also like to see variable pay (such as bonuses linked to individual or company performance) play a greater role in total pay packages, the survey found.
The CIPDs annual Reward Management Survey 2013 reports the top two drivers for increased pay budgets were pay rises (84%) and rise in staff numbers (51%), suggesting respondents are confident about increasing wages and taking on more staff in 2013.
The survey showed total spend on benefits also looks likely to rise in 2013, with 34% of private sector employers forecasting an increase, but only 15% in the public sector. Instead, public sector employers are more likely to report a reduction in spend on benefits (29%).
Charles Cotton, rewards adviser at the CIPD, said: "The issue of employee remuneration is high on the agenda in the workplace, and appreciation of the perils of short-termist approaches to reward is growing.
"It's encouraging to see employers wanting a more flexible way of rewarding their employees, in an effort to help align pay with the delivery of business strategy, but it's crucial to ensure that measures of performance look to the long term so that they encourage sustainable business growth."
Cotton added: "If appropriately designed, variable pay can help align organisational reward practices with the business strategy as well as assisting to communicate what behaviours, skills, values and attitudes the organisation values and how it will reward and recognise these.
"However, employers should be wary of an overreliance on the conventional carrot and stick approach to reward."
