U.S. employees are an unhappy lot these days, with a substantial proportion believing that they're being underpaid relative to others who hold similar jobs, whether at their own or at other companies.
And for all they know, they could be right: Barely half of employers even have a process in place to ensure that their employees are paid fairly.
According to Willis Towers Watson's 2016 global workforce study, just 53 percent of employees feel they're being compensated fairly, compared with others who fill similar positions in other companies, while 24 percent say they are not. And when it came to their own companies, 55 percent of workers say they are being paid fairly compared to coworkers in similar jobs, while 22 percent say they are not.
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A companion survey of employers, the "Global Talent Management and Rewards Survey," found that only 52 percent of employers have formalized a way to be sure their employees are getting a fair shake when it comes to pay.
The workforce study sought to see whether employees understand how their base pay is determined, and how their total compensation stacks up compared with others. Only about two-thirds of employees (65 percent) say they understand how their salary is determined, and less than 4 in 10 employees say they understand how their total compensation compares with that of the typical employee in their organization (39 percent) and with the typical employee in other companies (34 percent).
"When organizations begin to report on the CEO pay ratio and the pay of the median employee," the study said, "these employees will not have the context to properly interpret those numbers."
And of course, while not mentioned in this particular survey, there is the issue of pay parity for women — something, according to the World Economic Forum's "Global Gender Gap Report" for 2016, that won't be achieved for another 170 years. So who's to say many employees aren't right when they say they're underpaid relative to peers?
Fortunately, the Willis Towers Watson study says, "employers seem to recognize that the design of their pay programs is part of the problem," with 43 percent "hav[ing] already taken steps, or … either planning or considering initiatives to change the criteria for base pay increases."
However, it adds, the survey results indicate companies tend to hold managers at least partly responsible for the problem. Only 39 percent say their managers execute base pay programs well, and 26 percent disagreed with the statement that managers are effective at fairly reflecting performance in pay decisions.
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