The report warns UK companies are split between those that can afford to increase wages by 2% or more, and those stuck in a pay freeze.
It found 39% of the UK workforce either experienced a pay freeze or a pay cut in 2014.
In contrast, 40% received a pay increase of 2% or more and 18% got a pay rise of between 0.1% and 1.99%.
Private sector companies were more likely to have increased pay last year, with 48% reporting they gave a pay rise of at least 2%. More than half (54%) of public sector employers and nearly half (45%) of SMEs reported a pay freeze in 2014.
In terms of sectors, 54% of manufacturing firms increased wages while 35% froze pay. In the services sector, 47% of companies raised wages and 35% froze them.
The CIPD’s labour market analyst Gerwyn Davies said there is a correlation between pay rises and good leadership.
He said: “Evidence shows a clear correlation between employers that say they have adopted a high value business strategy (as opposed to a low cost strategy), and those that were able to afford a pay increase of 2% or more.
“Our report implies that the difference within sectors between companies that can afford to give a decent pay rise and those that are continuing to freeze pay lies partly in the quality of leadership and management and level of workforce investment.
“There is evidence that organisations that have more sophisticated product market strategies are more likely to have adopted more advanced human resource management strategies, characterised by progressive people practices and greater workforce investment.”
He added that he hoped the government would focus on encouraging businesses to improve productivity over pay. "This includes supporting businesses to improve management practices, and encouraging greater investment in skills and the effective utilisation of skills,” he said.
Forecasting for 2015, the CIPD predicts the basic median pay award will be 2% in the private sector, 1% in the public sector and 1.5% in the voluntary sector.
