The wage bill makes up 80% of spending for police
The pay bill of police officers and staff in England and Wales should be frozen to protect frontline services, business organisation the CBI has said.
The recommendation - one of a series in a report on policing - would help maintain the fight on crime at a time of shrinking budgets, it says.
The CBI also echoed suggestions in a government White Paper that savings could be made by pooling resources.
The Police Federation questioned the group's expertise on police finances.
The government White Paper published last year said police should save £100m this year, rising to £545m annually by 2014.
The police wage bill currently accounts for 80% of spending in the 43 forces.
At present, pay is negotiated nationally, with salary levels depending on length of service and seniority.
The CBI says an officer's pay should be performance-related, linked to the outcome of their annual review.
But to create a climate in which such reforms could be introduced, it suggests freezing the overall police pay bill. Some officers would still be awarded pay rises, but the costs would have to be offset elsewhere.
The report, A Frontline Force: Proposals For More Effective Policing, also looked at how savings could be made in administrative tasks such as human resources, and in IT, equipment procurement and the use of private staff in custody suites.
CBI deputy director-general John Cridland said: "The public sector investment boom of recent years is coming to an end just at a time when our police forces are facing increasing pressure to fight terrorism and sophisticated computer fraud.
"There is considerable scope for the police to find savings without compromising frontline policing. But this will require a major rethink of what we expect the police to do."
The Police Federation, which represents 140,000 officers, said policing could not be treated like an ordinary business.
It pointed out that bonuses and special payments suggested by the CBI were already available to some officers.
Chairman Paul McKeever said: "This CBI report is a double-edged sword. On the one hand it contains many sensible recommendations for improving efficiency that we have been calling for, such as improved collaboration, joint procurement and rationalising backroom functions.
"Yet on the other hand it contains several ill-informed suggestions focused purely on cost-cutting - namely, hiving off parts of the service for the benefit of private companies that the CBI represents and not for the greater good of the public."