Pay Perception and Communication- the key for employee engagement? - Curo Compensation

Pay Perception and Communication- the key for employee engagement?

28th August 2018

Aon Hewitt recently released their 2018 report analyzing the most recent trends in driving employee engagement and for the second year in a row, reward and recognition comes top.

We all know that good pay/reward is a critical part of any solid employee infrastructure and is needed to retain employees. This essentially starts with one thing; effective communication of how people are paid.

“How aware employees are of their organization’s compensation philosophy is directly tied to their perception of reward and pay fairness,” said Alison Avalos, WorldatWork​’s director of Membership and Total Rewards Strategy.

“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.”

Effective communication around the organisations ambitions and visions when linked to pay is a vital step. For those of you who have read Daniel Pink’s book, Drive, you will know Purpose as being one of the core 3 pillars of motivation (Autonomy, Mastery and Purpose). People buy-into the concept of the ‘bigger-picture’ and become more motivated when they can see how they are impacting the organisation.

With the right tools like Curo, communicating and making complex reward schemes that are tied to the purpose of the organisation is easier. Changes can be made easier, fairer, more transparent, however although the tools are there, we still need to be aware that the message that we communicate is still down to how people interpret it…the perception.

In a recent study PayScale found that pay perception — has a high impact on job satisfaction and subsequent job engagement.

The perception of fairness however varies on many different factors. Most recently as suggested by a new WorldatWork report, men and women have a different perspective on what is fair and how they compare internally and externally.

Men place a high importance on seniority, tenure and outside pay comparisons as opposed to women who feel that internal pay and work duties are a more important. It also suggests that Women tend to be more concerned around fairness of pay than men.

Therefore, with the right tools, structures and strategies, we can create effective and fair remuneration environments. We can communicate the message, we can tie the limitations around the framework you so desire to ensure fairness across the organisation however, if we are not cognisant of the differences that these messages are perceived and ensure that we address these in the strategy, we may fall short.

Join us on one of our OpenTours to see how Curo makes it easier.