Is there anything fair about employee compensation?
Employees eventually always grudge that they are lowly paid. After all, the employee that is completely & permanently satisfied with one’s compensation “package” is the corporate HR’s Holy Grail!
On the other hand, while employers have to strike the quite impossible balance between budget & employee pay satisfaction, there exists external factors too – The Supply Demand for Skills, Market Rates, Client relationships, State of the Economy, Worker Unionism, Political Influences etc.
Amidst all the myriad factors without much control on, how does an employer strive to achieve fair pay for it’s workforce?
To a large extent, compensation is actually the price an employer is willing to pay for the service of an individual. It’s quite similar to any buy decision that includes
- How badly do I want this service?
- Can I pay for it now & the future?
- What is my opportunity cost if I don’t buy this?
But what also complicates are the many human factors at play in the workplace; like
Is there balance in pay among similar profiles?
Can compensation be really linked to direct performance?
Are better negotiators taking undue advantage?
How much of premium pay without blackmail for the indispensables (i.e. those directly owning client relationships, product knowledge, etc)
- A quick search for the exact definition of the word fair throws the following
- treating people equally without favouritism or discrimination
- without cheating or trying to achieve unjust advantage
considerable though not outstanding in size or amount
Read again the last one – “considerable though not outstanding in size or amount”
Yes, given all the greyness associated with the matter of compensation, this definition of fair seems quite a reasonable & acceptable one when used in context of employee pay 🙂
What do you think?
This was orginally posted on GroSum
