The focus should be on how companies treat their employees not on the largely meaningless pay ratio statistic
This article can now be found at:
https://www.tom-gosling.com/blog/fairness-matters-pay-ratios-dont
This article can now be found at:
https://www.tom-gosling.com/blog/fairness-matters-pay-ratios-dont
Pay ratios are an outcome. The journey is how we treat employees, generate engagement and share the pie among all stakeholders.
Head of Stewardship and Sustainable Investment Strategy at Redington
4yTom, you won't be surprised to hear that I strongly agree that fairness matters. One reason why I think it's a better term than inequality is because it clearly cannot be summarised in a single number (I doubt inequality can either, but that doesn't stop people trying). While the pay ratio is clearly a relatively meaningless single number, I doubt that will stop people using it, and in spite of its weaknesses that may not be a bad thing. Given that most investors hold companies across the market as a whole, they always need tools to help sift and identify problems. The pay ratio may become one of those; one hopes that investors don't just stop there but that they then do the additional work of looking beneath the headline number to understand whether the company's treatment of its workers is indeed fair.
Independent adviser, Principal Associate IES, Visiting Professor University of Greenwich
4yi don't disagree Tom with much of what you are saying, and am currently working on how care worker pay could be increased without putting more care homes into bankruptcy. But having just come off an LBS webinar on the importnace of moral leadership, the real question is, is being paid £4 million a year with share and bonus plans which are not generally extended to the whole leadership a help or a hindrance to promoting policies of fairness and engagement in the organisation? If taking a 20% pay cut is a 'good' response in times of crisis in all senses of the word, why shouldn't it be the right thing to do at more normal times? Cant these folk live on £3 million? The PwC research shows execs themselves arent motivated by them and would rather have lower but fixed pay. thanks,
Retired PwC Partner
4yGood summary of empirical research on pay equality and fairness. Agree that companies truly focused on fairness will devote their energies to improving opportunities to lower paid employees
Simplifying Total Reward Communication | Delivering Actionable Insights for HR | Transforming Complex Reward Systems into Clarity
4yUnfortunately inequality is a growing problem in the UK. These disclosures are not targets. Whilst I appreciate that press may not it see it that way, surely this transparency will help society better self regulate?