By Jairus Ashworth, Head of Reward, Australia & New Zealand, Aon Hewitt

New findings from Aon Hewitt's Employee Pay Perception Report, show that employers don't have to increase pay to achieve a higher pay satisfaction. Communication strategies can be just as effective and a far cheaper way of keeping staff happy...

In this study that surveyed over 37,500 employees from 110 companies in Australia and New Zealand, workers were asked 40 questions. Those questions that correlated most closely to employees' pay satisfaction rating (i.e., those where employees "strongly agreed" or "agreed" with the statement "I am paid fairly for the contribution I make to the organization's success") are listed below:

Those employees that feel they are paid fairly also feel their organization delivers on the promises it makes, and recognizes the need to balance social, environmental and financial responsibilities. Those employees with high pay satisfaction also rarely think about leaving their current employer.

By drawing on our Remuneration Survey databases, in addition to the Pay Satisfaction data, Aon Hewitt was able to examine the link between the increase of pay and an employee's perception of their pay level. Findings showed that to increase pay satisfaction among employees by 10%, firms needed to increase pay levels by 8.5%.

Jairus Ashworth, Aon Hewitt's Head of Reward – Australia and New Zealand, commented as follows:

Talk is cheaper…

Interestingly, the Employee Pay Perception Report showed the points below correlated most strongly to the statement “I have a good understanding of how my pay and rewards are determined”. These responses showed that effective organizational communication and ensuring a clear understanding of pay structure and variables amongst the workforce can lead to positive benefits similar to a pay increase, namely retention and perceived delivery of promises. However, additional benefits are also derived.

The results are clear. By effectively communicating their reward strategy to employees, an organization can reap all the benefits associated with increasing levels of reward and provide employees with a much better understanding that their pay is linked to performance.

Contact

Jairus Ashworth is Head of Reward, Australia & New Zealand at Aon Hewitt. He can be reached at jairus.ashworth@hewitt.com.