Payscale recently released a fair pay impact report analyzing whether employees know if they are fairly paid and the impact their perception has on job-seeking behavior. The results don’t look good for employers. Most employees have no idea whether or not they’re fairly paid.
Most employees believe they are paid below market even when they aren’t
A whopping 86 percent of employees surveyed believed they were paid at market or below market when they were actually paid above market rates.
- Meanwhile, 28 percent of underpaid employees believed they are being compensated fairly until they found out otherwise
The perception of unfair pay impacts intent to leave
Pay can be intensely personal
- Without a frank conversation with their manager about how their pay is determined, employees are apt to assume not only that they are underpaid when they aren’t but also ascribe negative intentions to their employers for why they are not being paid enough
- When left unaddressed, these assumptions fester and lead employees to seek job opportunities where they believe the pay is better
Pay transparency correlates to less of a chance employees will look for other jobs
Perception of fair pay from pay communications has more impact on deterring job seeking than actual market penetration
- Employers need to up their game when it comes to communicating about pay
- A concerted effort to improve compensation strategy and pay communications can have a noticeable impact on employee morale and retention
