The Benefits of Pay Transparency
Mar 17th, 2022
During the month of March, we celebrate women’s history month and, equal pay day. If you didn’t know, March 15th is equal pay day. “The date symbolizes how far into the year women must work to earn what men earned in the previous year. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men's and women's wages.”
In 2022 wage inequality is still a major issue in the workplace. To combat the issue one of the biggest things we can do to is to promote pay transparency. The idea of pay transparency can be quite controversial, however it is important to note it truly “encourages businesses to establish a standard of equal pay for equal work and empowers female employees with information to advocate for themselves.”
Some benefits of pay transparency include:
- Greater diversity
“When companies are transparent about pay, it essentially eliminates the issue of unequal pay.” This adds greater value to a business and improves workplace culture. Groups who are often discriminated against will know they’ll be paid fairly, which will also add a competitive edge in recruiting.
- Better cohesion amongst employees
Pay transparency builds a cohesive workplace culture to improve employee loyalty.
- Higher productivity
When employees know they are paid fairly they naturally work harder.
Promoting pay transparency does not need to be a challenging transition. There are several easy ways to implement these pay transparency strategies in any organization.
- Figure out what pay transparency looks like at your company. Conduct a pay analysis to Identify Pay discrepancies.
- Publicly post compensation ranges in job postings.
- Creating a fair compensation model by setting a guaranteed base pay and offering bonuses based on individual performance.