Fairness is about how fair, how equitable an HR and wage policy is put together. Fairness is the basis. If the basis is not right, everything built on top of it will not pay off, or will pay off insufficiently. Before we make investments in HR and wage policy, we must therefore ensure a solid foundation: a fair HR and wage policy.
Fairness is about how fair, how equitable an HR and wage policy is put together. In professional literature this is often referred to as equity or organizational justice.
From hukaroi, we approach fairness in a similar way to extrinsic motivators, as monetary reward is one. Namely, it is a hygiene factor. Non-correct monetary compensation will be demotivating. Correct monetary compensation, on the other hand, will not necessarily motivate.
Ditto for other injustices in HR and pay policies. If there are injustices that are perceived as such, they will demotivate. Just HR and pay policies do not necessarily lead to motivation.
Fairness is the foundation. If the basis is not right, everything built on top of it will not pay off, or will pay off insufficiently. So before we make investments in HR and wage policy, we need to make sure we have a solid foundation: a fair HR and wage policy.
Every business must make fairness a focus.
Because injustices, in most cases, creep into every HR and payroll policy unintentionally and unknowingly. For example. Women, in most cases, are not paid less because people consciously discriminate against women. Rather, women are paid less because a bias has crept into HR or pay policies.
For example, a company that argues that there is no gender pay gap because, without exception, pay is at the sectoral scale ignores the fact that the gender pay gap is often the result of over- and underrepresentation, respectively. Men are often overrepresented in the highest-paid positions; women are often overrepresented in the lower-paid positions.
Fairness classically encompasses three dimensions:
Distributive justice, in turn, breaks down into external and internal distributive justice. Internal distributive justice is about whether one is fairly remunerated relative to his/her peers. External distributive justice is about whether one is fairly remunerated relative to similar workers in the labor market.
Procedural fairness is about whether procedures in themselves are fair. A textbook example is the policy on promotions or bonus policies. The situation where employee A who is not promoted while employee B is promoted need not be unjust if the procedure to do so is perceived as fair by both employee A and employee B.
Interactional justice is essentially about whether one is treated with respect within the organization.
In one or more of these dimensions, one may have the perception of being treated unfairly.
It is important to clarify that fairness is not necessarily about a factual fact. Fairness is about the perception of the employee(s) involved. When the perception of injustice is inconsistent with reality, that perception can obviously be disproved based on facts.
Type example is the employee who feels that he/she earns too little compared to similar employees in the labor market. This is why, for example, companies conduct a benchmarking exercise every two years to determine how one's pay compares to the market. Based on that benchmark, the employee's perception can be confirmed or disconfirmed.
That unfairness is not a static fact manifests itself in two areas.
First, employees who have the perception that they are being treated unfairly will become demotivated. However, this state of demotivation is not permanent. It is inherent in people that they will not resign themselves to this and will link certain action to it. That action may be that they will be less productive, that they will encourage other colleagues to be less productive, that they will show toxic behavior, that they will be absent from work more often, that they will resign, etc.
Second, creating a fair HR and wage policy requires a continuous effort from the different dimensions of fairness (distributive, procedural as well as interactional). For example. An investment in equalizing the wages of women relative to their male counterparts in one year may be undone if too little attention is paid to the procedures surrounding promotions, hiring and/or awarding bonuses.
One of the hottest topics when it comes to equity in HR and pay policies is the gender pay gap.
There are several reasons for this.
The principle of "equal pay for equal work" regardless of gender is enshrined in one of the UN Sustainable Development Goals (Goal No. 5 - gender equality).
This principle is also enshrined in European and Belgian legislation. In the context of the European regulations on transparent working conditions, there is stricter monitoring of gender equality. The gender pay gap must also be explicitly reported to the works council and in the annual accounts.
But perhaps the most important driver is the increased focus on corporate social responsibility that is about environmental sustainability, but also about social sustainability. Sustainability is an important point of focus for the big corporates and multinationals, which often walk in the spotlight, for the corporate image, to (continue to) make a difference at the business level but also in the labor market.
To measure injustices in your HR and payroll policies, we can do two things for you:
The two analyses do not necessarily have to be both. Obviously, the insights will be richer when we conduct both a data analysis and an employee survey.
In most cases, we do successive measurements of HR and payroll policies. That way we can observe trends across multiple data points and make more statistically sound statements.
In addition, we can test whether or not investments to make HR and pay policies more equitable have paid off. If the answer is yes, then we should capitalize on that. If the answer is no, then we should start adjusting investments for the future.
The benefits of measuring the fairness of an HR and payroll policy are great.
First, we can identify dormant injustices in HR and pay policies. Dormant because often people are unaware that injustices have crept into HR and pay policies. The reason is often that people are just acting in good faith and are unaware of certain biases. And if we know where there are injustices, we can look for solutions. To measure is to know.
Secondly, by carrying out several successive measurements, we can chart the progression and we can check whether or not the investments in HR and pay policies have paid off. Should we start capitalizing on our investments, or should we just start adjusting our investments?
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