Compensation and Hr

Pay Practice Openness

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In class Assignment - 5

Impact and issues pertaining openness of communicating pay practices in private organizations.

Misha Aima - 85020

Strategic Compensation: Issues and Opportunities ITU

Pay Practice Openness

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Abstract

This paper talks about understanding the issues pertaining whether or not private organizations should have a open communication policy of their pay practice. Pay information is very sensitive and impacts the workforce directly.We need to incorporate transparency in communication of pay policy and performance but also pay attention on how we go about doing it. The paper works around my view about the subject as a HR professional.

Pay Practice Openness

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Traditionally private companies have remained hush hush about how much they play their employees and what metrics they employ on paying them what they pay. The open pay structure has been more a prerogative of public companies where the law makes it mandatory for an display of compensation at all levels.

In recent times, many “new age” private organizations have dwelled into the issue of openly communicating their pay practice. These companies believe that by being open about how much they pay whom and how they pay that much , the employees are motivated to perform better and their confidence in the company increases because of “fairness”and “equity”. This also impacts the overall external business environment.When companies are open about how much they pay their employees there will be greater competitiveness to attract , engage and retain employees.

In my opinion greater communication about the overall compensation is a great boost for employee satisfaction and feeling of fairness about his/her pay. This will in turn increase organizational citizenship in the employees and greater employee satisfaction as well. For any organization this is positive payoff because this directly impacts organizational...