In its recently released Emerging Workforce Study (the fifth iteration since 1997), Spherion Corporation calls our attention to a significant divide between employees and employers on compensation. Three quarters (75%) of the employees surveyed cite compensation as the thing most crucial to retaining them, but only 26% are currently satisfied with this aspect of their job.
I think the statistics are revealing of a general and potentially growing disconnect between employees and employers around pay. I see evidence of this in my own consulting work, especially with organizations that are dominated by younger workers. There may be a host of factors at play behind the trend: from the unlimited availability of comparative pay data (widely ranging in quality and validity) on the Internet to the different attitudes and priorities of Gen X and Y employees in and entering the workforce. Good or bad news, what it adds up to is an employee population that is more inclined to challenge and/or disbelieve an employer's pay data, practices and policies than in the past.
We - as HR and reward professionals - need to appreciate and be prepared to respond to this challenge, and I think one of the best tools is transparency. I'm not talking about necessarily sharing everyone's personal compensation information with everyone else, but rather openly sharing how the pay program is built, where the data used to build it comes from, how it is designed to operate, and what its philosophical underpinnings are meant to be. And - certainly - I think individual employees should fully understand how the program applies to them (i.e., their salary range, etc.).
Today's (and tomorrow's) employees are not inclined to believe and accept a pay program that is shrouded in mystery. And while management does reserve the ultimate right to set salaries and salary opportunities, it is best done in an open and well-explained manner.