Most employees think their pay is too low, but it's not just about money

Steven Loeb · November 29, 2022 · Short URL:

A report from Gartner cites trust issues among employees that lead to negative views of their pay

There are a lot of things employees say they want from their employers in the current environment, including better benefits, more flexibility in where they can work, and a focus on diversity and inclusion, among others. What they want most of all, though, is the same thing people have always wanted: a good salary. After all, nearly 50 million workers quit their jobs in 2021, and over 60% cited low pay as a factor, with 37% saying it was a major factor in their leaving.

This is still a problem that isn't going away as the vast majority of workers still don't think they're getting what they deserve in terms of compensation, according to a new survey out from Gartner, which surveyed 3,523 employees in the second quarter of this year. 

In fact, only roughly one-third of employees, 34%, believe their pay is equitable, which leads to problems with retention and performance: employees who perceive their pay as not being equitable have a 15% lower intent to stay at their job, and they're 13% less engaged at work.

It's not just as simple as giving employees a higher salary, though; according to Gartner, it's not really about money at all, but about the trust and respect that employees feel from their employers.

When employees have negative perceptions about company culture, inclusivity, work-life harmonization, and experiences are all factors that can lead to them feeling as if they are not being compensated enough. 

“Employee perceptions of pay equity aren’t rooted in compensation,” Tony Guadagni, senior principal in the Gartner HR practice, said in a statement. “Instead, the main driver of perception is organizational trust – when employees don’t trust their employers, they don’t believe their pay is fair or equitable.”

There are a few ways employers can built this type of trust, Gartner outlined, including fostering open communication around pay information.

The company cited a survey it did with more than 3,200 employees in May of this year, which found that less than one-third of employees were aware that their organization was prioritizing pay equity; this is despite a survey from July that found 72% of total rewards leaders reporting that their organization’s senior leadership believes that pay equity is a high or very high priority. 

That means there's a disconnect between what employers say is important, and how employers are perceiving their actions, and this is leading to a lack of trust.

“When organizations educate employees about how pay is determined, employee trust in the organization increases by 10% and pay equity perceptions increase by 11%," said Guadagni.

Gartner also believes that HR needs to take a bigger role to address pay equity, even though most of those decisions are made at the manager level, with tools that will allow them make decisions in regards to who is being paid and how much, as well as a pay equity team that can deliver insights into the factors that cause pay equity gaps, along with authority to correct them.

“An ideal pay equity team consists of leaders and employees across levels, business units and functions with insight into the practices and processes that create pay equity gaps and a visible commitment to pay equity within the organization,” said Guadagni.

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