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June 26, 2002
Workers Unfamiliar with How Raises are Determined
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One of the survey's authors suggested for Ascribe news that the results speak to a lack of communication by employers, who might not mind giving smaller raises and bonsues but end up cheating themselves.
"Many employees and managers simply don't understand why they get paid what they do," Rob Heneman, a professor at Ohio State University's Fisher College of Business and a leader of the study, told Ascribe. "Businesses can't get a good return on their compensation investment if people don't understand how their pay is determined."
Most of the people surveyed for the study said they felt that their managers did a satisfactory job in explaining performance objectives and performance measurement. However, they were uncertain about the correlation between performance and pay.
According to Ascribe, only 40 percent of those surveyed said they agreed or strongly agreed with the statement "I know what I must do to increase my base pay." Only 38 percent agreed or strongly agreed that they knew how to increase their bonus.
Additionally, the survey results showed that employees knew more about their companies' stock options than their salary. However, the survey showed that people's knowledge about their salary is more influential in their pay satisfaction than other benefits.
"Obviously, workers would like both more pay and more knowledge about their pay," Heneman was quoted as saying by Ascribe. "But we found that additional increases to actual pay are not necessary to improve pay satisfaction - more knowledge is all that is needed."
The authors of the study didn't recommend sharing actual salary amounts of employees within the company, but did suggest offering information about pay policies, pay scale, and the ways in which raises and bonuses are determined. Furthermore, the study suggests that managers should speak with employees face-to-face rather than relying on manuals or training programs.
The results of the study were significant for highly paid executives as well as lower-paid, hourly laborers. Demographic factors such as age and education also had no bearing on the results.
Read more about the study on Ascribe's Web site.