What can you do when the colleague one desk away earns more than you for the same job? Josh Jennings looks at your options.
The boss spends more time making personal phone calls and surfing the net than he does getting the job done. You pick up his slack and then he takes the credit. Last week, you discovered he's earning $50K more than you for his troubles. Ever since, you've been keeping an eye on the employment websites for other jobs.
Salary envy among employees can have serious implications for businesses, according to professor Greg Bamber, director of research at Monash University's department of management and author of Up In The Air: How Airlines Can Improve Performance By Engaging Their Employees. He says companies should assume when they make special deals with employees confidentially or not sooner or later, the information might leak.
"It's therefore advisable that when companies are setting up their remuneration policies and practices, they should have some degree of transparency and internal equity, even though they're trying to respond to external market pressures," Bamber says.
"Because if people feel that it's not fair, they're likely to be demoralised or disengaged or unlikely to give the extra discretionary effort that employers often want people to give. Running the extra mile is often appropriate when there's a major issue or a crisis that an employer wants to confront."
A British survey last year by recruitment consultancy Hudson found about two-thirds of respondents wanted senior managers to disclose their salary but the non-executive chairman for executive jobs, career and network site Six Figures, David Langdon, says high-level salary disclosure can adversely impact on the culture of a company.
"I think employees should just get on with the job and worry about what their value is and what they're contributing to the business, rather than worry about what someone else is getting," Langdon says. "They may well be worth more and be able to negotiate more."
However, privacy-secrecy and the absence of transparency around pay relativities between jobs have been found to be two key factors to pay gaps in the finance industry, according to the Finance Sector Union, which combined with National Australia Bank to do a pay-equity audit of the bank in 2006.
And which group fares worst with pay gaps? Australian Bureau of Statistics figures from last month show women who work full-time are big losers in wages, earning less on average than men who work full-time, across all categories of work.
Bamber adds other groups are typically susceptible to copping raw deals in the salary negotiation stakes, too.
"Certainly there's evidence that migrant workers or particular ethnic groups may be disadvantaged," he says. "Similarly, casual workers may often receive a less-favourable reward package than core permanent workers."
According to the managing director of recruitment and HR consultancy Challenge Consulting, Elizabeth Varley, employees with more experience and skills are likely to be more apt at negotiating their salary.
"The people who are less experienced probably don't have the confidence or the tools to be able to enter into a negotiation," Varley says.
For employees who have the perception that a colleague earns more by doing less, the host of job-hunting website asktheheadhunter.com, Nick Corodilos, says they can benefit from putting together a business plan for their job.
"What does the job require in resources (including salary), what is the objective, what are the obstacles, what tools are needed and how will the job produce profit?" he asks. "If an employee feels unfairly paid, it's up to him to demonstrate how he will produce profit and to show what that is worth."
Varley has a similar view: "I would certainly say they need to take it to their manager or HR person and put it to them that the work they do is undervalued because of X, Y and Z they have been involved in improving their skills or career potential by undertaking further study or undertaking added responsibility in the role and they therefore want to renegotiate their grading position within the organisation."
According to Bamber, while there are recognised tools, procedures and surveys that equip employers with a basis to draw on to determine the most appropriate "band" an employee's salary belongs in, the increasing popularity of performance-based pay is creating new challenges for bosses seeking to achieve pay equity.
"Many employers have felt they wanted to reward people for giving a higher performance, which is understandable and often good policy but the challenge is how you measure performance," he says.
"Is it done on an individual basis or a team basis? Some endeavours to measure individual performance and to reward individual performance can actually hamper team performance, because in many contexts it's more important that a team performs well rather than just individual 'superstars'."
Not quite so equal:In 2008, the Equal Opportunity for Women in the Workplace Agency (EOWA) released Gender Income Distribution Of Top Earners In ASX200 Companies: 2006 EOWA Census Of Women In Leadership.
Key findings included:- Women hold just 80 from 1136 top-earner positions.
- Female chief executives earn two-thirds the salary of male chief executives.
- ASX 200 companies with women on the board have a higher percentage of female top earners.
