Unfair Pay? Here Is Why It Happens

It is a common gripe. There are employees with the same job title and duties with similar levels of experience and education. But somehow, someone’s paycheck has more zeros at the end. It is enough to make anyone feel undervalued and shortchanged.

There are prevalent reasons why employees receive different pay for the same work. Various forces can skew pay, leading to perceived unfairness despite no intention of lowballing certain employees. But before storming the boss's office, it is essential to understand the complex factors that influence pay.

The Systemic Issue of Unfair Pay

Unfair pay is often the result of systemic problems, not the fault of any single company or manager. One major issue is job segregation by gender. Women tend to cluster in “pink-collar” jobs such as teaching, nursing, and administration that typically pay less than male-dominated roles. This segregation is stubbornly persistent and contributes significantly to the gender pay gap.

Another systemic problem is lack of pay transparency. Without open communication about pay, employees have limited ability to determine whether they receive fair pay. Companies can take advantage by paying other groups less. To address this, certain areas have passed laws requiring employers to disclose pay scales for open roles.

Biases play a role as well. Subconscious biases lead managers to undervalue the work of certain groups. For example, people tend to perceive women as less competent leaders. These prejudices result in women receiving lower pay, fewer promotions, and less mentorship.

Tackling the pay gap will require addressing these issues through policy changes and a commitment to fair practices. With work, companies can move closer to fair pay regardless of gender, race, or other factors.

Lack or Inaccurate Salary Data

Employees often lack data about typical pay scales for their role. Without this data, they lack negotiation leverage and may end up accepting offers below the market rate. Common reasons pay data can be inaccurate or lacking include:

• Reliance on self-reported salary surveys.

People voluntarily reporting their pay in surveys can skew the data. Those earning higher pay are more likely to respond, skewing the averages higher.

• Narrow data sets.

Salary research based on a small, localized area or industry may not reflect national trends. It does not account for factors such as experience and education. Employees need broad, comprehensive data to make fair comparisons.

• Outdated information.

Pay data more than 2-3 years old is useless given how quickly pay scales can change. Employees need to look at recent, up-to-date sources to determine current fair pay ranges.

• Lack of transparency.

Other companies do not openly share details about their pay policies and ranges. This makes it difficult for employees to know whether they receive fair pay relative to their colleagues and industry peers.

With access to the right data and resources, employees can make a firm case for fair pay. But when this data is hard to come by, unfair pay is more likely to persist.

Knowledge is power, employees must keep looking until they find the data they can use as leverage.

Issue in Communication

Communication is complex, with countless opportunities for messages to become lost in translation. When an employee feels they receive unfair pay, it often stems from a lack of clear communication. This includes communication about pay rates and performance expectations.

Employees tend to assume that their pay is solely based on their job title or duties. In reality, pay depends on diverse factors such as experience, education, performance, and company policy. When the company fails to openly discuss these factors, employees develop false expectations about their pay.

Managers avoid discussions about pay to evade discomfort, but this approach often backfires. When employees discover pay gaps, they feel resentful and unappreciated. Companies can address this situation through transparent communication and explanation of pay structure and policies.

Specific, actionable feedback empowers employees, enabling them to control their pay and career path. Regular check-ins and performance reviews must clearly lay out expectations for pay raises and paths for career growth. With open lines of communication, managers and employees can get on the same page about fair pay.

Transparency and clarity are key to cultivating a sense of fairness in the workplace. When communication breaks down, suspicion and resentment may grow in the gaps. The solution lies in building understanding through honest, compassionate discussion.

Signs of Unfair Pay

• Receiving less pay than colleagues.

An employee doing similar work but earning less than colleagues signals unfair pay. Other companies try to justify pay gaps by arguing that certain employees have more experience or credentials. With employees having comparable levels of education and performing similar duties, a huge pay gap lacks a reasonable explanation.

• Pay is not based on performance.

In various companies, annual raises and bonuses are based on employee performance over the past year. Unrecognized or unrewarded exemplary work and accomplishments indicates that pay is unfair or not merit based.

• Lack or no opportunities for career growth.

Consistently passing an employee over for promotions or high-visibility projects signals unfair treatment. This is particularly true when they have not received clear feedback about performance issues or areas needing improvement. Lack of career growth opportunities prompts employees to leave their jobs. It is crucial to ensure they are in an environment that values and fosters their talents and potential.

U persists in other workplaces, but there are signs employees can watch out for. IEmployees always have the power to push for change through respectful communication. They always have the option to leave for a company that values and pays their employees fairly.

While unfair pay is frustrating, identifying the reasons behind it is the first step towards making a change. By understanding common factors that can contribute to pay gaps, employees can better advocate for themselves. With commitment, unfair pay does not have to be a status quo. Recognizing and addressing biases will enable society to reach a point of pay equity.