Dec 09, 2020, 09:15 ET
WALTHAM, Mass., Dec. 9, 2020 /PRNewswire/ -- During this time of both economic and societal upheaval, organizational commitment to fair pay remains high according to Salary.com's 2020 Pay Practices and Compensation Survey*. Seventy-three percent of organizations agree, or strongly agree, that their employees are paid fairly and almost half rated their employee engagement as "excellent or above average." However, the survey revealed a lack of structure to support and validate that fair pay commitment.
More than half (56 percent) of organizations do not have a formal process in place to address pay equity and 70 percent do not use salary structures to manage pay. "At a time when the issue of pay equity is of heightened national interest, it is concerning that a majority of organizations lack a formal pay equity process, though I predict that next year's survey will find progress made in this area," said Chris Fusco, Salary.com's Senior Vice President of Compensation.
Formal compensation philosophies are slowing gaining more traction, with 62 percent of participating companies reporting having a compensation philosophy, up from 57 percent in 2019. However, 74 percent still do not provide formal training to managers on how to talk with their employees about pay.
"Communication, a critical element of pay program success, continues to be an area where organizations are lacking," said Fusco. "Any manager at any company must be able to honestly and accurately answer the question from an employee, 'How is my pay determined?'. To integrate a greater understanding of a compensation philosophy, employers must increase their level of transparency and let go of some of the discretion involved in making pay decisions."
Transparency requires the review and improvement of pay policies and practices so they will be perceived by employees as fair: both externally competitive and internally equitable. Forty-six percent of participating organizations rated their employee engagement as "excellent or above average." The top driver of employee engagement is a healthy relationship between managers and employees.
According to Fusco, to increase employee engagement, managers must foster interactive employee relationships and incorporate the practice of open communication into ongoing performance monitoring.
*please click here to download the report.
Survey Overview and Methodology
The 2020 survey compiled responses from 1,395 participants. Survey invitations were sent electronically on 8/8/2020. Data was collected via an online survey management tool and the survey closed on 9/23/2020. The report represents 21 industries and multiple ownership types including public, private, joint venture, non-profit, and government. Organizations ranged in size from small US-based businesses with fewer than 99 employees to global organizations with greater than 100,000 employees. Responses were prepared by HR Managers and above (61%) and by HR professionals.
Salary.com is the leading SaaS provider of cloud-based compensation market data, surveys and analytics. Founded in 1999, the company serves over 25,000 survey participant organizations, over 8,000 business-to-business software subscribers, and over 30 million employees globally. Salary.com is committed to helping organizations drive company success by aligning compensation practices with recruiting, performance, and development initiatives through easy-to-access data and meaningful insights. The market leading CompAnalyst® SaaS platform accelerates compensation workflows, delivers real time data and powers accurate, equitable and competitive compensation. Through its Salary Wizard and pioneering website, Salary.com delivers continually updated, reliable market pay data and career content to over 30 million visitors each year. For more information, please visit the company website at www.salary.com.
SOURCE Salary.com, Inc.
Share this article