Often, salary transparency is more important than actual earnings

November 11, 2017

Nearly 90% percent of workers think they are underpaid—but they actually are earning at or near the market rate, a survey released on November 9 by the online salary database PayScale has found.

In this case, perception eclipses reality: Employees who think their employers are fair and transparent in how they determine pay rates are more likely to be happy at work than those who actually are paid the going rate for their jobs.

As a foundation for its study, PayScale compiled salaries and corresponding market rates for the jobs of more than 500,000 people. The site then asked respondents to rate a series of statements—including ones about job satisfaction and employers’ pay transparency and fairness—on a scale from one to five.

Those confident in the fairness and transparency of their employers’ pay systems, the survey found, were 5.4 times more likely than people paid a market rate to be highly satisfied with their jobs.

“Companies are determining pay in this kind of behind-the-curtain way,” said Chris Martin, the lead data analyst at PayScale, in an interview with Bloomberg. “Employees are forming opinions and think they are getting a raw deal.”

Employers determine pay using a variety of factors, some of them highly subjective. Advocates for women and people of color have pushed transparency as one way to close gender and racial pay gaps.

Still, the move to transparency has been limited. Just 6% of the 7,700 employers whom PayScale surveyed said they publish everyone’s salaries; a full half of all the employers said they tell employees only what’s on their own paychecks.

The new survey findings suggest resistant employers have something to gain from demystifying what they pay their workers, said Martin: “This is a way for organizations to develop this deeper level of trust.”

Research contact: phyllis@fireflycmns.com

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