Professional services staff jaded with pay

by 08 Feb 2005

EMPLOYEES in professional, business and property services are less likely to believe they’re paid as well as people in other organisations, according to recent research.

Conducted by Mercer Human Resource Consulting, the research found that only 35 per cent of employees in this industry group felt their pay was as good as or better than pay offered by other organisations in the industry.

Additionally, just 67 per cent of professional services employees understood how their pay is determined, compared with a national average of 78 per cent.

“Ensuring people recognise they’re receiving a fair day’s pay, understand the way the way their pay is calculated and the value of their benefits package, will yield dividends for employers because employees who have an understanding of these factors are less likely to be considering to leave their jobs,”said Sandy Hutchison, practice leader for Communication at Mercer Human Resource Consulting.

“Organisations who don’t address the issue of inadequate remuneration can affect their employment brand in an adverse way – employees will seek a place where they feel valued for their effort and where there is adequate reciprocation.”

There was a psychological contract between an employee and their employer, which Hutchison said was defined by performance expectations the organisation has of the employee and the reward expectations they have of the organisation.

“When this contract is rescinded employees will go through the process of ‘truing up’ what they perceive to be a shortfall on their part,” she said.

“The organisation will most likely experience symptoms such as reduced employee productivity, increased absenteeism and eventually, higher turnover.”

Interestingly, the survey found that employee commitment and satisfaction improved when employees knew and understood their pay structure and benefits, with 90 per cent who knew how their pay was determined indicating very high job satisfaction.

The Whats Working survey, which took in more than 1,200 employees across a broad cross section of companies and industries, also found that professional services workers who are looking to move jobs in the next 12 months feel that their organisation does not allow them to provide good customer service and believe that teamwork is not encouraged.

Additionally, only 50 per cent of employees in the industry believe that their appraisal systems adequately distinguishes between poor, average and good performers.

“Organisations have two levers to work with – they can push performance (through recognition) or pull performance (through incentivisation),” said Hutchison.

“They often fail to differentiate between performance and reward – they don’t know how to provide differential reward based on differentiated performance, and end up rewarding poor performance.”

She said appraisal systems often didn’t measure the right things, so employers failed to reward the right things. Examining the methodology of the appraisal system and ensuring the right skills and behaviours were being encouraged for the short and long term was also critical.

“Also, the appraisal system must be simple, understandable and flexible –it needs to be fair and transparent, otherwise the old issues related to equity and trust resurface,” she said.

The survey also provided evidence of the returns that can be yielded when employees are kept informed about matters that affect them, such as significantly higher levels of commitment.

“Getting your HR strategy right is one thing. Ensuring everyone understands it and supports it is another,” she said.



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