Money matters are top of mind amongst North American employees.
That’s according to Ceridian’s inaugural Pay Experience Report, which explores how North American workers feel about their employers’ pay practices, and how these practices impact their lives at work and at home.
The report outlines findings from a survey of 1,891 workers – part-time, full-time, and contract/freelance – in the U.S. and Canada, conducted by Hanover Research.
The research revealed some notable insights for employers when it comes to meeting employee expectations around the pay experience – namely, only small majorities of respondents said they’re satisfied with the transparency of information they receive about pay, and the fairness of pay reviews.
Here, we’ll go deeper into the survey results, and what they could mean for employers.
Transparency is an important factor that impacts how employees view their pay. That is, employees want information into why they’re paid a certain amount, how it relates to their role within their organization, and what it might be at another organization.
The Pay Experience Report found that the level of satisfaction with pay transparency amongst employees could be improved: 57% of respondents said they’re at least somewhat satisfied with the transparency of this information, while 56% said they were satisfied with the fairness of pay reviews.
Ceridian’s Chief People and Culture Officer Lisa Sterling says in the report that it’s time for companies to shift towards a more open dialogue around discussing pay. That open dialogue comes with accountability, she adds.
“Pay data is so readily available, so organizations have to be incredibly thoughtful about how transparent they are, and then make sure their message aligns with what they’re actually doing, and what their pay philosophies represent,” she says.
Pay transparency is also critical in how companies approach and address gender pay equity. One interesting finding from the report is that only 53% of female respondents believe they’re paid equal to men.
Providing visibility into pay structures is important, says Sterling. “If people understand what the pay ranges are for the roles they work in, it allows them to have greater insight into why they are compensated the way they are.”
Managers, take note. Ceridian’s survey found that only 56% of employees said they were at least somewhat satisfied with the fairness of their pay reviews (26% were somewhat satisfied, while only 30% were completely satisfied).
The report notes that this may be due to the fact that many organizations don’t conduct pay reviews regularly. In fact, 59% of survey respondents said that they don’t have clearly defined pay reviews that occur at least annually.
Ceridian’s Sterling says that organizations should consider thinking beyond annualized performance evaluations. Traditional pay reviews typically align to either a corporate budget cycle, or the anniversary of an employee’s hire – but these don’t necessarily align with an employee’s actual performance or contributions.
“The way we compensate people should be tied to their contribution, their influence and their impact on an organization,” Sterling says. “Often, we wait far too long to have those conversations or to make those adjustments, and we end up losing talent because they are given opportunities for larger comp and salaries at other organizations.”
This is an opportunity for organizations to review their compensation practices – specifically, evolving pay reviews to become more continuous, and align more with how employees impact their organizations.
Technology can help empower a more creative and strategic approach to compensation, helping leaders to make decisions in real-time, and understand how they can implement new compensation practices like spot bonuses. The report adds that evolving these practices is key to retaining top talent.