Most
HR managers feel that pay awards are based on an employee’s relationship with
their manager, and not their ability, according to a CIPD survey.
In
the report, Views on Pay Management, four out of 10 HR professionals said their
organisation is secretive about pay decisions – with only a third of firms
having an open policy.
On
the effect of unfair pay awards, eight out of 10 HR professionals believe they
lead to a negative effect on motivation, three-quarters feel they have an
adverse effect on retention, while 59 per cent link them to recruitment
problems.
In
all, 13 per cent say their organisation does not care about the fairness of pay
decisions.
CIPD
chief economist John Philpott said: "There is a perception that pay
structure and awards are somewhat unfair in UK organisations. A lack of
transparency may be a key factor in this, given that respondents are more
likely to feel their organisations are secretive about pay.
“Our
view is that organisations need to be more effective in communicating
information about pay and how it is determined. Communication should be
ongoing, regular, and not just when people join the organisation."
The
CIPD poll of 1,300 HR professionals also found that a quarter of HR professionals
think directors and CEOs are overpaid.
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