Think your workers don’t pay attention to fairness in pay and promotions? Think again.
Organization, with HR’s guidance, must ensure that rewards programs are based on solid principles of fairness and equity that engage employees from all different backgrounds and experiences. According to a recent WorldatWork survey, HR professionals indicated that employees are concerned about how their employers base promotions, pay, and career development. More than half of respondents said that their workers complain about these issues at least occasionally.
Among other findings:
· About 1 in 3 HR professionals said that employees complain frequently about issues to fairness when it comes to base pay.
· According to respondents (2 in 3), their employees seldom or never complain about retirement benefits.
· Respondents overwhelmingly said that individual performance is a top consideration in determining pay fairness, but they weight responsibilities more heavily in base-pay decisions. They said that “individual potential” and “individual performance” are key determinants of nonfinancial rewards.
· Nearly two-thirds (64%) of respondents said that consistency with the organization’s rewards philosophy is the most important factor in determining rewards. About half (49%) said that consistency with what has been promised to the employee is “very important.”
· Respondents indicated that while c-suite execs often see both internal and external rewards fairness as important, these upper level managers don’t believe they are essential or critical.
· Respondents agreed that, depending on how it’s done, communication can either improve or erode employees’ perceptions of rewards fairness. They identified market survey/external benchmarking, reward strategy and design, and a culture of openness/transparency are improving perceptions. They saw inconsistent application/favoritism as eroding it.
· About three-quarters of respondents said that internal rewards equity is “extremely influential” or “moderately influential” on employee motivation, satisfaction, engagement, and retention.
· The HR professionals surveyed said that men and women assess pay fairness similarly; but men often focus more on external comparisons, while women are more internally focused.
· Survey responses indicated that women are more vocal than men when there are differences in fairness, particularly regarding flexible work arrangements and base pay.
In an interview with SHRM, Scott Cawood, WorldatWork president/CEO, said, “The results point to the need for much more transparency about how compensation programs work, especially when we see continued concerns about miscommunication, wage gaps, and pay inequities.”