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By June 6, 2018No Comments

A new report reveals the deep disconnect which exists between managers and HR departments. More specifically, while 85 percent of managers agree or strongly agree that they feel confident in their ability to explain the rationale behind pay decisions to employees, only 37 percent of organizations share that confidence in their own managers. The research found in the 2018 Compensation Best Practices Report (CBPR) shows that effective conversations with employees about pay can build trust, as well as increase retention and drive deeper engagement throughout the organization.

“More and more employers are realizing that when employees feel good about their deal, it has a positive impact on the bottom line,” said Tim Low, Senior Vice President of Marketing at PayScale – the organization that commissioned the study. “As a result, conversations about pay are crucial because they provide an opportunity for employers to build trusting relationships and show employees how valued they are to the organization. Yet, many managers are unable to fully articulate how pay was determined, leaving employees feeling disconnected and dissatisfied with their employers.”

And, in this case, it seems managers don’t know what they don’t know. A full 67 percent of managers believe their employees are paid fairly, but employees clearly aren’t getting the message, as only 21 percent of employees feel they are fairly paid.

Other highlights reflecting compensation trends from the 2018 Compensation Best Practices Report include:

  • Retention a major concern, but wages still won’t see meaningful increases – Almost 60 percent of organizations reported being very concerned about employee retention heading into 2018, which is an uptick from last year. However, 73 percent of employers estimate the average raise in 2018 won’t differ much from 2017, holding steady at 3 percent or less.
  • Bonuses are more important than ever – Since wages didn’t experience significant growth this last year, employers relied on specific bonuses to attract and retain hard-to-find employees in competitive fields such as technology. More specifically, organizations offering individual incentive bonuses increased from 64 to 67 percent last year and hiring bonuses were on the rise, 34 percent in 2017 vs. 27 percent the year prior.
  • Employers increasingly concerned about workplace inequities, but more can be done – Top-performing organizations were more concerned about fairness than typical organizations, as more of these companies reported actively addressing workplace gender inequities in 2017 (35 percent vs. 26 percent) and race/ethnicity inequities (28 percent vs. 23 percent). That said, 63 percent of top-performing companies still have no plans to conduct a gender or race/ethnicity pay equity analysis in 2018.

To view the entire 2018 Compensation Best Practices Report: The Great Divide, please visit:

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