Pay and Benefits: How employee perceptions of pay can affect company culture

Sometimes an employee may approach you and say that they feel underpaid.

The knee-jerk reaction might be to simply increase their salary but this is not always the best option.

Employee’s perceptions of pay are not always accurate and the truth of it is that although they might feel underpaid, there is a chance that they are not.

A survey from PayScale of 71,000 people found that:

• 64% of employees thought they were paid below market value when they were not
• 35% of employees paid above market value thought they are paid below

 

But even if employees only feel underpaid, it will still impact their job satisfaction, their engagement and can also lead to employees wanting to leave your business.

They might also have some strong feelings about overpay. On Twitter recently there was a trending hashtag called #FatCatTuesday. It quickly spread the message that by the first Tuesday of 2016, Britain’s top bosses would have made more money than an average worker can make in an entire year. This kind of topic hits a real nerve, especially after the 2008 economic crisis.

A CIPD survey performed in 2015, found that 71% of employees thought that the CEO of the business was paid too much and 59% were demotivated at work because of high-level CEO pay.

So what can you do?

Talk to them…It can be that simple! It may also be time to review your pay and benefits scheme. There are a few things you need to consider:

• Transparency needs to be planned out carefully – Make sure that the businesses are clearly aligned with your pay and benefits scheme
• Paying people more may not necessarily increase their performance – you need to consider a pay and benefits scheme that goes beyond financial rewards and considers the non-financial aspects as well
• Make sure that you craft your own unique approach – your pay and benefits scheme needs to fit with your company culture, values and aims
• Get support – if you don’t have your own in-house HR team that can help you develop a pay and benefits scheme to fit your needs, consider outsourcing. Find out more here.

To find out what improvements you could be making to your business with Reality HR on your side, give us a call right away on 01256 328 428 for a free fifteen-minute phone consultation. Or you can fill out the form below and organise a callback at your convenience.

 

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from Reality HR Limited http://www.realityhr.co.uk/blog/pay-and-benefits-how-employee-perceptions-of-pay-can-affect-company-culture/