Pay, trust and engagement

why pay drives engagement
Scales of Justice to indicate fairness

Are you surprised when pay consistently pops up in league tables about drivers of engagement?  Sitting firmly at no.3 globally in Aon Hewitt’s 2015 research

We all know being motivated and engaged at work is a whole lot more than high pay.  But we also know a key factor in engagement is trust.

Pay is a driver of engagement because pay is all about trust. 

We agree our pay when we join a company.  It’s a negotiation to find a rate you are prepared to work for, and the employer is prepared to give.  Both employer and employee have a say. 

But pay isn’t a static thing.  Over the course of an employment relationship it needs to change.  Driven by events such as new skills or job role, or simply on an annual basis because the world outside has changed.

The reality is that pay is no longer a two-way conversation where both parties have a say.  It becomes something employers do to employees.

So you have to trust your employer to ‘do the right thing’ when it comes to decisions about your pay.  To keep it at a level that is fair compared to your peers, and true to your worth.  Year after year.  For the duration of your employment.

You can make reasonably informed judgements about how well they are doing too.  Social media provides a handy source of market data on pay levels.

The problem is; ‘doing the right thing’ varies.  It isn’t the same for every person, or for every company.

For some it’s about the same pay for everyone doing the same job - for others it’s about pay that reflects performance in the job.  For most it’s about pay keeping up with market rates – but for some it’s about pay keeping up with the cost of living. 

Where do organisations go wrong?

  • They haven’t established how to ‘do the right thing’ - they don’t have a well thought-through reward strategy
  • They’re ‘doing the right thing’ but employees disagree - they haven’t considered the culture, or involved employees, in creating their pay strategy
  • Employees don't know about ‘the right thing’ - they haven’t shared the pay strategy and how pay is set
  • They are not ‘doing the right thing’ - they don’t have great pay structures and performance management systems to enable fair and consistent pay decisions to be taken in line with their pay strategy

It’s not necessarily easy to get this right, particularly in ever-changing and complex organisations.  But, trust is critical for engagement,

So, don’t stop focussing on pay.  Pay is all about trust.

 

At Verditer, we help you create fair and transparent reward that employees trust.

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Photo: Scales of Justice by Michael Coghlan.