Just half of employees believe they are paid fairly

Only half of permanent employees (51%) think they are paid fairly and as little as 34% think that everyone in their organisation is paid fairly, finds a new survey.

The Reward Management 2019 report, compiled by the CIPD, found that the perception of unfair pay is being driven by employers’ lack of communication around pay, and so the professional body for HR and people development is calling on employers to be more transparent about both their pay processes and outcomes.

According to the findings, when people don’t think they’re paid fairly, organisations reduce their chances of attracting and retaining the best talent. Employers also miss the opportunity to improve employee performance and well-being.

Interestingly, 60% of people say that their line manager has never explained to them why they get paid what they do; just 18% of employers have a formal process to assess and manage pay risk and only 39% of employers have carried out an equal pay audit in the past three years to ensure they are complying with the law.

Charles Cotton, senior reward and performance adviser at the CIPD, commented on the recent findings, “Failure to be transparent about pay can make staff feel that they are being kept in the dark and feed a perception of unfairness.

“There’s a real opportunity for organisations to do a lot more around communicating their pay policies to staff, and encouraging line managers to talk to their teams about it, so staff understand how and why such decisions are made.

“But communication is only part of the story and won’t ensure people are paid fairly in the first place. Continued scrutiny over executive pay and gender pay gap reporting shows this is still an issue which many organisations are wrestling with, so businesses need to be on the front foot when it comes to understanding and assessing pay.”

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