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Fairness and Equity in Rewards

August 21, 2018  |   Compensation,Uncategorized   |     |   Comments Off on Fairness and Equity in Rewards

BCR-BlogOrganizations must ensure that rewards programs are rooted in principles of fairness in order to motivate and engage employees from different backgrounds and experiences. WorldatWork and Dow Scott, Ph.D., of Loyola University Chicago, gathered data about organizations’ perceptions of fair rewards and the tools rewards professionals use to create reward programs, policies and structures.

An executive summary of their findings is as follows:
• Promotional opportunities lead among employee concerns in either internal and external equity or fairness.
• Individual performance and work responsibilities associated with the job are high-ranking criteria in determining base-pay rewards fairness, while overall organizational performance is a major factor for variable pay.
• “External rewards consistency” falls to the bottom when considering how to determine rewards. Consistency with rewards philosophy is most important.
• Respondents agree that internal rewards equity is incredibly influential to employee motivation, satisfaction, engagements, and retention.
• Men and women tend to focus on different criteria when assessing pay fairness.
• Generally, women express more concern than men about fairness of their total rewards packages, but men tend to express more concern about variable pay and titles.

You can find the details of this survey at Worldatwork.org.

In our consulting practice, Benefits and Compensation Resources (BCR) has seen how employees feel about what’s important to them is how fairness is applied when looking at how base salary increases and advancement in the organization are determined. They want to see consistent transparent guidelines applied in these areas within a company. Communication regarding the company’s philosophy in these areas is key to employees’ perception of equity and fairness.

Benefit programs are not viewed as an area where employees voice concerns about internal equity or fairness as they are documented and widely communicated.

It is important to have a written rewards philosophy that is shared with all employees backed up by a set of guidelines that are administered fairly and consistently across the organization.

Total Compensation Philosophy

A well-designed total compensation philosophy considers a number of key elements:

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Contact Us

BCR has helped many companies develop and communicate their rewards philosophy as well as develop guidelines to put on the application of the philosophy in practice in a fair and consistent manner. Reach out to us to discuss how we can assist your organization.

Written by: Barbara Manny, BCR President and Consultant

BCR is a local, minority-owned firm with more than 25 years experience in serving non-profit, public, and privately held entities in the key areas of Benefits and Compensation Consulting, Performance Management, Human Resource Organization Development, and Human Resource Information Systems and Processes.

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