Pay Equity Study Reveals Differing Perceptions

Pay Equity Study Reveals Differing Perceptions Within Organizations

A new study in America reveals that organizations are making progress when it comes to prioritizing equal pay among men, women, and underrepresented groups in the workplace. Despite that, employers and employees have differing perceptions on how pay equity is being achieved, and barriers to implementing long-lasting change persist. This study was sponsored by UKG and conducted by Harvard Business Review Analytic Services.

The study, Making Pay Equity Work for All, compared responses from 453 company executives and 3,005 employees of all levels. It examined strategies that separate pay equity leaders from other companies, as well as the impact that intersectionality has on the perception of progress in this area. Furthermore, it studied how leadership, pay transparency, clear communication channels, and innovative technology tools can help organizations achieve lasting pay equity.

Brian K. Reaves, chief belonging, diversity, and equity officer at UKG said, “This study shows now, more than ever, that organizations must recognize the importance of prioritizing equal pay in the workplace, disparities persist, and employers’ actions are not always enough or aligned with employees’ expectations.”

Employee Perception

Fewer than half of employees — about 41% — believe their employers have successfully achieved pay equity, and 26% say their organizations have been completely unsuccessful in ensuring equal pay. Furthermore, the survey showed that 49% of companies do not have a well-established plan in place.

One of the reasons for the divergence of opinion between employers and employees is a lack of transparency. Forty-six percent of organizations admit they are not being transparent about pay. This has led to reduced awareness of pay disparities by employees and therefore an obstacle to speaking up or negotiating.

Another issue is the unequal effort put forth by companies to solve pay equity for different groups of people. Employers say the majority of their efforts are directed at women, followed by people of color, ethnic minorities, members of the LGBTQ+ community, and those with disabilities.

According to the study, companies need to implement changes in order to establish an effective and long-lasting solution. Dedicated leadership, auditing tools, a commitment to transparency and clear communication are all foundational to this process. Companies can learn more about employees and improve their pay equity through employee surveys, bench-marking and business intelligence and analytics tools.

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