Topic 1: Employees Doubt Their Pay is Fair (from textbook, p. 384)

A recent survey by PayScale asked more than 500,000 employees about their experiences, and the results painted a dim picture of their compensation-related perceptions. The survey asked about their pay and perceptions and also compared those responses with the companys data on market pay. According to the responses, only about one-fifth (19%) believe they are paid fairly. One year later, a smaller survey uncovered similar results.

This attitude, however, may be driven more by perception than by reality. Of the respondents who said they are paid less than the market rate, only 11% reported pay below the market rate in PayScales database for that job. And job satisfaction was related more to employees perceptions of fairness than to the level of pay they reported. Salary.com has seen a similar pattern, in which many employees incorrectly believe they are underpaid. Often, a reason is that their job titles are inflated relative to work responsibilities, so they are comparing themselves

Employers are not helpless in this situation. The PayScale survey further reported that only about one-fourth of employees (23%) see a transparent process for setting pay rates in their organization. This suggests that employers can increase the perception of fairness by ensuring that fair practices are in place and then communicating about pay more effectively. Employers also can address equity concerns more broadly alongside other sources of employee satisfaction. For example, they can provide clear career paths, recognition for accomplishments, positive relationships with managers, and interesting, meaningful work.

Questions:

1. Based on the evidence given, what seem to be likely reasons why most employees doubt they are paid fairly?
2. Suggest two ways that better communication could address the issues you identified in question 1.