68% of employees believe their pay is unfair per a Gartner survey.

Employees who perceive their pay as inequitable have a 15% lower intent to stay with their employer. They are also 13% less engaged at work than employees who perceive their pay as equitable.

So, the perception of unfair pay impacts retention and engagement.

Are you communicating with your employees about how you make pay decisions? What factors are used in this decision-making process?

Is your pay decision making process centralized or decentralized? Are those people involved in pay decisions referring to and consistently using the written processes and tools you have created? If they cause pay inequities, you’ll have higher labor costs later after you fix the problems.

Can you defend your assignment of performance ratings to each employee? Can you defend who is tagged as “ready now” for a promotion in your succession planning meeting?

Have you looked at the pay decisions you make for new hires? This has a significant impact on your pay equity over the long term.

How do you assess employee potential? Does this factor into your pay decisions?

Some employers are discussing these questions and creating a strategic communications plan to meet and exceed the legally required pay transparency requirements. Some employers are not.

Don’t wait. Your employee attraction, retention, and engagement are at risk.

If you don’t communicate proactively, your employees will fill the silence with stories. Some of the stories will be fiction. Wouldn’t it be better to communicate the facts?

#paytransparency #payequity #fairpay #humanresources #rewards #compensation #pay