The Importance Of Transparency In Your Payroll Process
Quick question: Do your employees know how their pay is calculated? What values and conditions affect their salary? With complex wage calculators and different values, it can be hard to understand exactly how payrolls are processed. However, with the many technological advancements and cultural changes our world is going through, the view on transparency in the payroll process has also shifted into a clearer light.
Salary transparency - wherein every employee is open to all the information regarding how their pay is calculated - is slowly being embraced as the norm in organisations around the globe, and with good reason. Being transparent in your employee payrolls makes it obvious to them that their pay will always be based on what they do and how well they do it, not who or what they are - that their compensation depends not on gender, race, or other such traits, but solely on the effort they put in. Not only will this avoid any bad reputation for your brand, it will also improve employee satisfaction.
Employee satisfaction usually relates to their motivation to work, which has a direct impact on their productivity. Other than that, they have a clear view of the position each person has in the company, whether it be his own, his partner’s, or his team leader’s. With an improved understanding of their salary, they are now more likely to put more effort into going up the ladder and delivering consistent quality - and will give you better results in the process.
That motivation to move up the company job ladder also means that they are less likely to leave the company. Your company gets to enjoy more productive members and a lower turnover rate. Most of the persuasion work needed to retain your workforce will be done by the employees themselves. They will see the innate incentive of working with your business and may even promote you to friends and coworkers, creating an environment that cultivates hard work and amiability.
A clear-cut wage calculator also adds another aspect to your working environment: trust. Specifically, trust between employees and management, though trust among colleagues can also be developed this way. Being unwilling to share information about your payrolls will always breed suspicion because most employees have the mindset that if you are hiding something, there is something shady going on in your payroll system. You may think that it will end with just a handful of paranoid employees, but unrest can actually spread without you even noticing it. A simple conversation over coffee can be enough to make a group feel dissatisfied, or worse, vilify your business outside company grounds.
By refusing to be more open about your payroll system, not only will you be incurring some unpleasant situations, but you’ll also be foregoing the benefits that your business could be enjoying. While some still want to seal their lips when it comes to salary, transparency is gaining more acceptance as the new standard practice for most businesses - and you shouldn’t hesitate to apply it to your payroll as well.
D&V can help you create and maintain a more transparent employee payroll system so that everyone in your company can have a complete and clear understanding of the compensation process. Contact us now and enjoy a more trusting, pleasant and motivating work environment!