More than three-quarters (70%) of employer respondents believe that gender pay gap reporting will help to reduce the gender pay gap, according to research by the Chartered Institute for Personnel and Development (CIPD).
Its Reward management: focus on pay report, which surveyed 715 employers, also found that 67% think it will help to reduce the gap to some extent and 3% believe it will reduce the gender pay gap to a great extent, however, 30% think that reporting will not have an impact on reducing organisations’ potential gender pay gaps,
The research also found:
- 68% of respondents are open about how pay levels and pay increases are set, with 31% favouring great transparency.
- 71% of respondents are open about how pay rises have been calculated, and 59% are transparent about the size of wage increases awarded as a result of transparent pay calculations.
- 91% of respondents assess an employee’s performance against individual goals, with 53% of this group using this approach to inform salary and reward decisions.
- 27% of respondents use 360-degree assessments for performance management, and 24% utilise peer assessment.
- 70% of respondents believe that market rates are the most important factor in determining wage levels.
- 41% of respondents use gainsharing as part of a group reward scheme, where employees receive a bonus that is linked to productivity improvements or production cost cuts. This is compared to 20% of respondents that used this in 2015.
Charles Cotton (pictured), senior reward and performance adviser at the CIPD, said: “While we’re still some way off from seeing full disclosure on pay and reward, there are strong indications that employers are increasingly willing to be open about the processes behind their pay decisions, and in some instances, the outcome of these. This trend is part of a much wider shift in business accountability which we’re seeing through gender pay gap reporting and calls for greater transparency on executive pay.
“Fairness, inclusion and equal opportunity are at the heart of good work and increased transparency gives organisations the chance to explore their pay practices, as well as shed light on wider workforce issues. We expect the Financial Reporting Council’s latest proposals for a revised UK Corporate Governance Code to add further momentum to this trend.
“While skills and labour shortages are driving up starting salaries in certain sectors and locations, this pressure doesn’t seem to be having any impact in influencing how [employees] progress through their pay bands. There could be employee relations issues in the future if new staff are being paid more than existing staff for doing similar jobs. Reward professionals need to ensure that recruitment salaries are justified and look at job and task redesign in order to boost productivity and increase pay for all employees.”