“My bonus is bigger than yours” – open pay systems

Should everyone know everyone else’s pay? The CIPD have a mini poll on “should you share your pay details in the cause of transparency”. The current tally is 57% saying yes. There are calls from a range of pressure groups for open pay systems either in the cause of equality or to highlight where public sector cash has gone.

In most blue-collar jobs the main variation between employees’ pay arises from either output payments or overtime. Public sector jobs, mostly, have published grades and pay ranges, often with pre-scripted progression through the range; as do many private sector organisations. So where are the ‘secrets’?

Smaller organisations will often pay individual salaries to reflect the employer’s view of the job weight and the contribution of the individual (which does not mean it must be inaccurate or prejudiced). But, for the most part, it is pay differences based on some form of performance linkage that are not made public. Performance assessments can determine pay progression or bonuses; some having mathematical linkages between performance and pay; others based on senior opinion.

In such circumstances, therefore, revealing salaries or earnings is equivalent to revealing performance assessments. It is one thing for individuals to boast about their own high ratings (not very British, though). But should the employer effectively announce who has a good appraisal and, more importantly, who a bad one? Many companies have an employee of the month award. Few have a worst employee award.

Try answering these two questions. Can you logically answer yes to both?

That pay gap again

The announcement last week that the gender pay gap had widened in 2008 brought the usual screams of indignation and demands that the government do something. The HR press was a little more temperate, though not exclusively so. The ONS announcement, of course, gives a much more considered interpretation. I have written before (The gender pay gap) about the need to break the gap down into its constituent causes if any useful progress is to be made so I will just highlight a few interesting aspects.

Rewarding technical staff

Last week I attended a CIPD forum on the topic of reward, retention and motivation of professionals and technical specialists. My feeling was that not much has changed over the years and that ‘techies’ present many of the same problems that they always have. In particular that many grading structures still value managing people and resources above technical skills with the consequent loss, or demotivation, of seasoned professionals who cannot progress to senior grades. Professional specialists are, apparently, deemed to be too involved in detail to be any good at delegation and management of teams. A cynic might point out that if those who are so good at delegation had paid more attention to detail we might not have had the lost tax disks, the T5 fiasco or the overrunning Liverpool Street closure. So what are the real issues for rewarding professional and technical staff?

The Gender Pay Gap

A recent ONS survey finds, unsurprisingly, that the ‘gender pay gap’ varies with age; running from virtually zero for people in their 20s to around 20% for those in their 40s. The CBI claims this shows there is little real discrimination – just different life choices and circumstances. The unions jump on the report as underscoring the unfairness of the ‘gap’.

In practice reference to the ‘gender pay gap’ compounds the difficulties of discussing across-the-board pay differences between the sexes. A pay difference measured across the whole working population clearly compounds a wide spectrum of causes. The elements that contribute to the gap range from actions and attitudes that are clearly discriminatory to those that reflect, essentially, lazy practices that could be changed to the consequences of work choices that cannot be eliminated without abandoning equal value concepts.

While there are plenty of academic papers going into the detail of all this, the public just hear that there is a gap of around 18% and assume that all of it is down to blatant discrimination and assume it should be zero. The debate would be better served if the issues could be separated out; but politics does not work like that.