Ever wondered if you are being paid fairly for the work you do, or if the constant endurance of your passion for what you do for a living does not pay you back enough, according to market standards? Surprisingly, more than half of the world's population is not being paid fairly. This is where ethical compensation outlines fair pay, regardless of attributes such as gender, race, and ethnicity, and aligns with an equitable compensation system for employees.
Organizations not only need to have strong policies and values but also a robust technology to ensure that their employees are paid fairly. In this article, we will explore how ethical compensation influences organizations in maintaining a sustainable culture that promotes fair pay and how technology can support this goal.
For the organizations to grow in their respective fields, they need to retain talent and meet the expectations of the employees for transparency in their pay. Along with the changing regulatory laws imposing a fair pay model and the expectations from the younger generations today, it has become vital for organizations to be on top of these to survive in the competitive labor market. Almost 90% of Gen Z employees openly discuss their pay structure, and half of them are not inclined towards applying for an employer that does not disclose the salary range for a job opening.
Employees are particularly demanding a clear outline of how they are compensated based on their role and responsibilities, the criteria for promotions, and a complete outline of how their individual performance impacts the compensation. With this growing trend, organizations are also shifting their approach to and disclosure of compensation structures. According to Mercer, 75% of employers acknowledge that employees expect transparent pay practices and understand the importance of this due to multiple factors like attracting talent and increased employee retention.
The necessity of a strong payroll backbone
An organization’s fundamentals to achieve a fair pay structure lie in the robustness of its payroll system. It not only aids in employee satisfaction with regard to timely and accurate pay but also enables the organizations to model their equitable pay structure devoid of legal risks and abide by the regulatory laws. This also ensures that the possibility of a legal dispute is minimized, which in turn enhances the overall success of the business.
Laws that drive ethical pay
Across the globe, governments are introducing stronger measures to protect employees from wage discrimination and to promote fairness in the workplace. Regulations increasingly emphasize pay transparency, ensuring that job applicants and employees have clear insight into compensation structures. Many countries have enacted equal pay legislation, requiring employers to provide the same wage for the same work, regardless of gender or other characteristics. In addition, laws often govern minimum wage requirements and mandate fair compensation for overtime. These legal frameworks not only reinforce ethical pay practices but also compel organizations to move beyond choice making, fair compensation, a matter of compliance as well as integrity.
Technology’s Role in Making Ethical Pay Operational
Organizations can easily adapt to a fair pay structure if their payroll system and processes are robust enough to comply with laws specifying ethical compensation. The right technology will also aid organizations in identifying potential biases in their current compensation structure, thereby creating an opportunity for adjustments in the structure and streamlining their processes. Organizations leveraging technology to create transparency with their employees by providing them with the information related to fair pay, fostering a positive culture, and embodying fairness and trust towards their employer.
How Neeyamo Supports Fair and Compliant Global Pay
Neeyamo’s payroll 3.0 offers a well-defined approach towards the regulatory laws regarding fair pay and utilizes AI-powered tools to provide a seamless experience to organizations and their employees. At Neeyamo, we focus not only on timely and accurate payroll models but also on ensuring adherence to local regulations through automation.
Reach out to us at irene.jones@neeyamo.com to know more!
