Ensuring pay and reward fairness has become a significant challenge for employers and rewards leaders. New data released today finds that male and female employees may base their perceptions on what is fair in terms of pay and rewards on different criteria.
To examine this critical and timely issue, WorldatWork partnered with Dow Scott, Ph.D., of Loyola University of Chicago, to gather data about organizations’ perceptions of rewards fairness. Released today, the study replicates and extends a study conducted on pay fairness published in 2011.
“How aware employees are of their organization’s compensation philosophy is directly tied to their perception of reward and pay fairness,” said Alison Avalos, Director of Membership and Total Rewards Strategy at WorldatWork. “This presents an opportunity for organizations. If they can raise awareness of their compensation strategies and gain employee buy-in, their employees are more likely to accept that the rewards offered are fair and equitable.”
The study revealed that male employees placed more importance on seniority/tenure at the organization and external pay comparisons than did their female counterparts. Females were believed to place more importance upon internal pay comparisons and work responsibilities associated with the job.
“What is curious is that male and female employees differ in terms of external and internal pay comparisons,” Scott said. “Overall, female employees were seen to have greater concerns about rewards fairness than did male employees.”
Key Findings:
- Promotional opportunities lead among employee concerns in both internal and external equity or fairness
- Individual performance and work responsibilities associated with the job are high-ranking criteria in determining base-pay rewards fairness, while overall organizational performance is a major factor for variable pay.
- Generally, women express more concern than men about fairness of their total rewards packages, but men tend to express more concern about variable pay and titles.
“This issue is transforming how organizations deal with pay and rewards. To survive, thrive, motivate and engage employees from different backgrounds and experiences, organizations must ensure that rewards programs are rooted in principles of fairness,” Scott said.
