Unfair pay perceptions linked to poor communication

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No communication between boss and employee fuels perception of being paid unfairly

Just under half of the permanent employees believe they are being paid unfairly and that this perception is being driven by their bosses’ lack of communication around pay.

This was discovered by the CIPD’s report, ‘Reward Management 2019’, which found that 49 per cent of employees hold the opinion they are not being paid fairly and two-thirds (66 per cent) believe that most people in their organisation is not being paid fairly.

The CIPD believes that when employees feel this way, companies reduce their chances of attracting and retaining the best talent as well as miss the opportunity to improve employee performance and wellbeing.

The report also found that 80 per cent of employees feel their CEO is not paid the right amount. Also, 60 per cent said their line manager has never explained to them why they get paid what they do. Under a third (30 per cent) of employers have been provided with a fair definition of what fair pay means within their organisation.

Charles Cotton, senior reward and performance adviser at the CIPD, said:

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.

In order to obtain these results, the CIPD surveyed 2,031 employees and 465 HR professionals.

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