Although the average role-to-role pay gap is 7.4 percent, the average employee perception of the gap is 15 percent, an impression that can harm employees' work quality and intent to stay with an organization, according to a Gartner report.
Gartner surveyed over 20,000 employees across 40 countries, analyzed salary data from more than 500,000 employees on Glassdoor, surveyed 75 total rewards leaders and interviewed over 50 heads of HR, total rewards and compensation to understand perceptions and practices of pay equity.
Here are four reasons for employers to address pay equity, according to the report.
1. The report found employees who think their organization is dedicated to addressing pay equity were 20 percent more likely to make extra effort when completing a job.
2. Additionally, employees who believe their organization is committed to addressing pay equity are 24 percent less likely to actively look for a new job.
3. Employees' perception of a pay gap leads to a 16 percent decrease in their intent to stay with the organization.
4. The decrease in employees' intent to stay is 50 percent worse than experiencing a pay freeze and equates to an employee thinking he or she could earn 30 percent more at a different company doing the same job.
To read about ways for employers to address pay equity, click here.