I just had a conversation with a client who was trying to address a high level of unfavorable ratings in their annual engagement survey to employee perceptions of “fair pay”. It’s a question that frequently does poorly, but the scores were particularly low here.
There are instances when perceptions of “fair pay” relate to external equity– employees are upset that others down the street at another company are making more than they do in similar jobs. But more often I’ve seen more significant problems with internal equity– that employees see marked differences in pay amongst peers. Often the perception of internal inequity can be summed up by a comment I heard from an employee:
That guy in our department has been around forever. I’m just getting started here, but I’m working twice as hard as he is. He’s been sleeping on the job for a long time, but because he has more tenure he’s paid more. That’s just not fair.
No, it’s not fair. More importantly, that perception led this employee, and many others, to report lower levels of engagement in many other areas. Said another way, employee perceptions of unfair pay impact overall employee engagement.
Consider:
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Are there areas where internal inequity in compensation exist in your place of work?
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In some cases, are poor performers getting paid more just becuase they have more tenure and, if so, what can be done to address their lack of performance?
Mark Hirschfeld 
Women deserve the same pay as men.. Obama said so too.. I have to to admit that I am very disappointed, for the only new thing that Canada’s prime Minister Stephen Harper could do to supposedly help the recessions is to basically copy the same old past Liberal programs and they were not all that great for a start too. http://thenonconformer.wordpress.com/