Pay Equity Can Help Improve Employee Morale

Studies have shown us that happy employees are more productive employees. They are more likely to come to work eager to take on the day. Less stress leaves more room for innovation and creativity. This joy even encourages teamwork and collaboration. But if morale crumbles, completing everyday tasks, let alone striving to do even more, becomes an uphill battle. Pay equity is one of the issues that destroys morale.

Therefore, it is in the interests of employers to do whatever they can to boost employee morale. Employers can achieve this by offering flexible schedules and encouraging a work-life balance. A company could create a fun, highly social workplace. But what really impacts employee morale is how you pay them. The lack of pay equity exerts a sinister influence. Employees thrive on the sense that they work in a fair place.

How do you ensure pay equity in your organization? Is equity part of your pay philosophy? Are your employees confident that you are paying them what they deserve? Pay equity is quickly becoming one of the most important things to consider in a company. Pay ewquity is the foundation of trust between employer and employee.

The Importance of Positive Employee Morale

Employees are the driving force behind any company’s success. As an employer, you will want to do whatever you can to ensure they are satisfied in their role. Employees who feel appreciated are more likely to remain with your company, improving retention rates and decreasing turnover. Pay equity is at the heart of fair treatment. Additionally, employee morale:

• Increases workplace productivity and the quality of work
• Encourages employees to go above and beyondduring challenging times
• Helps your organization attract and retain talent
• Reduces company costs involved with turnover, absences, and burnout

We often see low employee morale due to burnout. Why do people burn out at work? Stress. Whatever the root cause is, stressed employees are not happy in their jobs. You can then start to see the domino effect of decreased productivity, increased sick days, distant concentration, and eventually resignation. A lack of pay equity is often the first domino to fall.

Ways to Improve Employee Morale

If you notice a negative shift in the attitude your employees bring to work, it is time to make some changes. There are several ways to improve employee morale. It is important to think beyond immediate solutions. We are going to discuss a few methods that you should permanently integrate into your business practices. Starting a pay equity project built on pay transparency is a wonderful place to start.

Employees want to know that they can trust their employers. A Slack study found that 80% of workers want to know more about how decisions are made in their organization. If workers cannot trust leadership, why would they express themselves honestly and openly? Transparent pay equity programs model open communication. Employers should discuss company changes and share the responsibility of decision-making with the team. In any type of relationship, trust boosts morale.

The same Slack study found that 87% of employees want their future company to be transparent. Going hand in hand with building trust is transparent communication. Transparent communication is a central pillar of pay equity. This should be a two-way street. Communicate goals and strategies and then ask for employee feedback. Ensure you are clear about your expectations. When employees know what is going on and that they can voice their concerns, it is much easier to be happy. Use pay equity as a sandbox.

To keep morale high, you must offer your employees praise. You could even consider small rewards or short-term benefits to say thanks for their efforts. Some employers just expect their workers to apply 110% constantly. Recognition can go a long way in ensuring that employees feel appreciated, increasing morale, and reducing the likelihood of burnout. Adhering to pay equity principles ensures that your recognition efforts are level.

Diversity, equity, and inclusion are factors that play a key role in how your employees feel at work. It is difficult to remain dedicated to a job when you do not even feel welcome there. Any pay equity gap between protected groups aggravates the problem. Inclusivity should be wired into your company’s policies. Managers must be trained in DEI and know how to recognize gaps. There should be regular audits to monitor how diverse the team is and to scan for bias. Publicly focus on pay equity to get results.

Tying into each of these methods to improve employee morale is pay equity – ensuring equal pay for equitable work. Your employees will not trust you unless you pay them fairly. It is difficult to offer genuine appreciation for a job well done when that person knows their counterpart earns more than them. There is no point in having a diverse workplace when compensation is not based on skills and performance.

How Pay Equity Serves Employees & Employers

Pay equity is key to improving employee morale. It helps everyone feel like they are truly welcome in the company. Employees can come in confident that their role is equally as appreciated as their counterpart who delivers comparable work. This greater sense of fairness facilitates teamwork and proactive employee engagement. Individuals feel more driven, which has a domino effect on motivation and performance.

But it is not just employees who benefit from pay equity. Employers have a lot to gain from it, too. Happy employees, motivated by fair compensation practices, deliver quality work. The work is innovative and achieved with creative teamwork. Employees who are satisfied with their jobs are also less likely to leave, meaning increased retention rates. That then attracts top talent and saves the employer on turnover and hiring costs.

Take Home Message

If you are trying to improve employee morale, the answer is pay equity. As Salary.com explains, “Pay equity is defining how organizations approach their relationship with their employees, radically altering how we foster workplace culture and engagement.” Until your employees are confident that your organization values fair pay practices, they will struggle to be genuinely happy in their roles. As Shawn Achor once said, happiness inspires productivity.