Dive Brief:
- Only 32% of employees say they are fairly compensated, and only 34% say their pay is equitable, according to results from a second quarter Gartner survey of more than 3,500 workers.
- Despite employees’ perceptions, most organizations reported to Gartner a prioritization of pay equity; 84% of total rewards leaders who responded to a July survey said they conduct annual pay equity audits, and 72% said their organization’s senior leadership regarded pay equity as a high or very high priority.
- Workers’ perceptions do not necessarily reflect company commitments, Gartner pointed out. “Employee perceptions of pay equity aren’t rooted in compensation,” said Tony Guadagni, senior principal in Gartner’s HR practice, in a release. “Instead, the main driver of perception is organizational trust — when employees don’t trust their employers, they don’t believe their pay is fair or equitable.”
Dive Insight:
Poor communication and transparency may be the biggest culprits behind workers’ suspicions regarding a lack of fair pay. Gartner itself noted this in its press release, pointing to findings from a May survey of workers that found only 38% understood how their pay was determined, and fewer than half consulted co-workers about pay or used third-party pay sites to analyze their salary.
Transparency remains a point of contention among execs, some of whom are hesitant to get on board when not legally obligated to do so. Researchers have unearthed a number of pros and cons to various forms of pay transparency at work.
On the side favoring transparency, it may help companies advance pay equity, often a DEI goal for organizations (and, as Gartner found above, a professed priority for senior leaders). Obscuring pay information can also erode trust — not just among current employees, as Gartner pointed out, but also among potential applicants. Transparency on the front end may even save organizations money in recruiting.
But as recently as September, nearly one-third of employers surveyed by WTW said their organizations were not ready for pay transparency. They cited concerns about possible reactions and questions from existing employees; notably, a recent ResumeBuilder survey found that 70% of workers said they’d demand the top of the salary range if provided with one. A Cornell researcher also recently shared findings that pay transparency can increase envy among co-workers.
Posting salary ranges in job descriptions may be the primary focus of most workplace transparency conversations right now, but organizations hesitant to embrace full transparency overnight can take steps to prepare themselves for what appears to be the future expectation among workers. HR pros and managers can learn the framework for and share what determines salary, for example — a question nearly half of workers said their supervisor could not sufficiently answer.
