Although, traditionally our salaries are supposed to be private, it is fair to say that people talk and there is a greater desire for transparency. As a result, it is common for organisations to find themselves under pressure if employees recognise that they are paid significantly less than their colleagues. This can raise serious concerns surrounding equal pay and discrimination.
As more emphasis is placed on greater transparency in business, this issue has come to the forefront with the recent BBC gender pay gap scandal. In light of this, what can New Zealand businesses learn from this scandal?
BBC Scandal Summary
In July 2017, the BBC released the names and pay of all employees who earned over £150,000 (NZD$264,255) following a demand from the UK parliament to release remuneration details.
As the state broadcaster, the BBC is connected to the UK government through royal charters that set out public obligations and editorial independence. In the most recent royal charter, the government demanded that the BBC disclosed the list of those earning over £150,000. This figure was slashed by Prime Minister Theresa May after David Cameron had initially placed this disclosure level at over £450,000 (NZD$792,540).
The list disclosed 96 employees earning over £150,000 a year. As the list only included those who get paid from the TV licence fee, the full number of employees earning over £150,000 could be much higher. However, the findings of this revelation are concerning enough.
These remuneration figures suggest that there are gender pay differences at the BBC.
Of the 96, just three are women and the top seven are all men - suggesting that there is a significant gender imbalance in the pay at the BBC.
In reaction to the pay release, Prime Minister Theresa May has accused the BBC of pay discrimination.
"I think what has happened today is we have seen the way the BBC is paying women less for doing the same job as the men. I want to see women paid equally with men." - Theresa May
Although what happens now is unclear, businesses around the world including New Zealand must acknowledge the increasing desire for transparency across pay and takes steps to ensure they are addressing pay equity.
Understanding Equal and Fair Pay
Everyone is entitled to a fair and equal pay regardless of their gender, ethnicity, age or sexual orientation. One of the ways to ensure this is occurring in your business is to have the right remuneration policies and structures in place.
Remuneration should be a respectful and clear conversation. As employees are becoming more engaged with remuneration, rewards and equal opportunities, businesses need to ensure they are offering fair and balanced pay to their staff.
Business leaders can leverage tools such as market benchmarking, pay structure design and job evaluations to make sure there's a process for employees to earn the right and fair wage.
Achieving pay equity goes a step further then same pay for equal work. Pay equity is when employees are rewarded based on their contribution not their attributes.
Organisations that design organisational and reward structures that align individuals with an organisation's overall goals, use a multifactorial job evaluation work value assessment approach, implement a robust performance management system combined with peer review, and develop a comprehensive dashboard of key internal workforce metrics to monitor the impact, will be poised to identify and effectively address some of the underlying causes of pay inequity. Discover some more detail on these strategies in our article on Achieving Pay Equity in NZ.
By taking these steps and being ahead of the curve in pay equity policy, businesses can avoid the negative backlash that may come about from releasing pay figures.
The team at Strategic Pay are remuneration experts with a wealth of experience and a passion for developing solutions that work for you. If you have any questions or queries or wish to seek more guidance, please contact us.