Fair Pay : Foundation for Engagement

A fair pay as per the industry standard is responsible for driving employee engagement.

Why do people look for work or why do they find a job? is there a need to be employed? Why should a person work?

The only answer to all the above questions is money. People look for work or find a job to earn money. The need for employment arises out of the need for earning money. The basic needs of a person and his family are dependent on the availability of money and money is available only when a person does some work, either makes a product available or provides a service.

Employers know and understand this. They know that only the right kind of pay structure can help them attract the right kind of people to work for them. The pay structure is a necessary part of effective management. It makes sure that the pay levels are externally competitive and internally fair. A well-designed pay structure provides a logical framework on which remuneration decisions are based with regard to recruitment, performance, and more. It has the right balance between affordability and competitiveness. 

Relation between fair pay and employee engagement

Money motivates people to work hard. Therefore companies and big organizations reward outstanding employees with bonuses and cash rewards. This becomes a fair and effective way for management to show appreciation for hard-working staff.

There are times when organizations hire people who are not good at their job and act as a major factor leading to the failure of the organization. If the organization has a pay structure that clearly defines the role of each employee in the organization, clearly determines the job level/ grade and pay, is transparent for the employees to easily understand how and what they are going to be paid, has clear guidelines about how to progress in career and pay, helps in engaging employees, instills confidence in the management and supports the decision-making process, it will certainly act in favor of the organization as it will create a strong foundation to engage employees.

A fair pay is an attraction factor for candidates. It can act as a dissatisfying factor if it is perceived as unfair. Many business and financial experts feel that a company should be able to pay enough to its employees. There are some companies pay more by taking extra care of their employees, providing them the best facilities at work so that their employees evolve and innovate while performing their tasks. Today there is an urgent need for the organizations to fix the salaries beforehand and make the payment as promised. This will help in building a strong foundation of trust and satisfaction.

Transparency in pay

An organization needs to fix the salary based on the performance and contribution of an individual towards the organization’s success. For this, it is necessary that the performance management system and the pay structure are transparent. The transparency will ensure that the employees understand that they are being paid as promised.

Last but not least it is not important for companies to pay a higher salary to be able to retain their employees. If a company pays just the right remuneration and takes care of its employees even when the growth is slow, it is bound to perform better in the long run. This again contributes towards creating a strong foundation to engage employees.


Therefore to build a robust, competitive, and fair pay structure a company should have three main ingredients:

  • First, external pay benchmarking insight
  • Second, internal job evaluation
  • Finally, the current pay data, ensure that the design is not costly and ultimately affordable.