April 17, 2024

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Does greater pay transparency lead to better corporate culture?  “Comparing net amounts is meaningless.”  My guide

Does greater pay transparency lead to better corporate culture? “Comparing net amounts is meaningless.” My guide

GobatThe Flemish is usually very conservative about what he earns. At least that's the classic view. However, research shows that both employees and employers believe that increased pay transparency has a positive impact on corporate culture. But how can you handle that best? In addition to the potential advantages, are there also disadvantages? Jobat.be I posed the question to two payroll experts at HR services firm Acerta.

All wages on the table: is it a good idea?

How much do my colleagues earn and am I entitled to more if I compare my salary to theirs? It is a topic of interest to employees and employers in many organizations. Research by international recruitment agency Robert Half shows that 64% of employees believe increasing pay transparency has a positive impact on company culture. Among employers, this number is 59 percent.

Ellen Roelants and Simon Herrmann, payroll experts at HR services company Acerta, put the findings in the Belgian context. They also support the claim that more transparency about employee pay can have a positive impact on corporate culture. “Pay transparency does not mean that the employer must disclose the wages of all employees. Essentially, employees need insight into the rules and procedures surrounding pay increases. “It creates a greater sense of fairness,” says Ellen Roelants. “This way you will see that employees can make peace.” With wage differences.”

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Look beyond net salary

Simon Hermann also emphasizes that pay transparency should revolve around procedures and regulations. “This prevents employees from comparing net wages, or apples and oranges. This is counterproductive and says nothing about other benefits someone may or may not receive. He points out that wages in many sectors are subject to benchmarks, ensuring transparency in That's the case. At least in theory. “We're also seeing more and more salary ranges in job postings, but they're so broadly defined that they miss the mark. For example, seniority and age play a very important role, especially in Belgium, and this creates a snowball effect.

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Service history is under pressure

This immediately brings us to a difficult point. Because what do you do as an employee with a long history when you notice that someone relatively new to the company is approaching your salary? “We see an interesting contradiction here between employees, who want to be rewarded for their loyalty and expertise, and employers, who primarily want to reward individual performance,” Roelants says.

The current war for talent has a huge impact on this. “To attract young apprentices, entry-level wages are often very high and in some cases close to the level of someone who has been working in that position for ten years. Here again, transparency about the logic used is very important. Herman also points out that employees today are reaching Their wages maxed out more quickly than they had in the past.”After six or eight years, then the situation stabilized. In the past, your wages continued to increase gradually. This means that the value added of a newcomer after five years is actually the same as the value added of a person with high seniority. This may be an incentive for the latter group to reorient itself.” Find out here the factors that determine your salary.

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Transparency is more important than ever

For employers, this means that their pay policy is somewhat distorted and they need to engage in more discussions than ever before. Roelants: “Managers must clearly understand the principles behind pay policy, so they have clear tools for communicating pay. This also prevents employees from having to turn to HR – and prevents HR from playing the bogeyman role. It is especially important for employers Monitor pay consistency and be careful about small promises. “This often quickly means a big commitment for employers.”

Finally, are there also drawbacks to payment transparency? Roelants and Heirman don't think so. “You can avoid disruptions by clearly communicating logic, regulations and procedures. Distributive justice can provide an additional positive incentive. However, some employees measure their performance against that of others who earn more, but then they clearly know where this difference comes from.”

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