New Statistics: Employee Pay Perception

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27th October 2010, 05:39pm - Views: 2855

News From Aon Hewitt



Frances Denny, Marketing Manager ANZ, Aon Hewitt

02-9101- 9042

Money Talks but Talk is Cheaper…

27.10.2010 – New findings released today from Aon Hewitt’s Employee Pay Perception Report, show that employers

don’t have to increase pay to achieve higher pay satisfaction. Communication strategies can be just as effective and a

far cheaper way of keeping staff happy...

In the study; which surveyed over 37,500 employees from 110 companies in Australia and New Zealand; workers

were asked 40 questions. Those that correlated most closely to employees’ pay satisfaction rating are listed in order


Table A: Pay Satisfaction – I am paid fairly for the contribution I make to the organisation’s success 

Rank (in order of




Overall, my benefit plan meets my (and my family's) needs well


This organisation delivers on the promises it makes to employees


Our organisation recognises the need to balance social, environmental and financial



I rarely think about leaving this organisation to work somewhere else


It would take a lot to get me to leave this organisation

By drawing on Hewitt’s Remuneration Survey databases, in addition to the Pay Satisfaction data, Aon Hewitt were

able to examine the link between the increase of pay and an employee’s perception of their pay level.  Findings

showed that to increase pay satisfaction amongst the employee population by 10%, firms needed to increase pay

levels by 8.5%.

When looking at a median salary of $70,000 per annum, the Employee Pay Perception Report identified that it would

cost nearly $6,000 per employee to achieve increased pay satisfaction, which of course would only increase

satisfaction at that point in time; costs would carry on to the next period and grow year on year.” comment Jairus

Ashworth, Aon Hewitt. 


Interestingly, the Employee Pay Perception Report showed the points below correlated most strongly to the statement

‘I have a good understanding of how my pay and rewards are determined.’ Showing that organisational

communication and ensuring an understanding of pay amongst the workforce can lead to similar positive benefits as

a pay increase, namely retention and perceived delivery of promises. However, other benefits are also derived also. 

Table B: Communication of Pay and Rewards

Common outcomes with Table A are highlighted in blue, with additional benefits derived from communication left clear. 

Rank (in order of




This organisation delivers on the promises it makes to employees

Misc Miscellaneous Aon Hewitt 2 image


Overall, the way we reward and recognise people in this organisation helps us produce the

results we want


It would take a lot to get me to leave this organisation


My performance has a significant impact on my pay


The way we manage performance here keeps me focused on achieving this organisation's



My manager helps me understand the organisation's goals and how my work contributes to


The overlap with the linkages to overall perception of pay are striking; we can immediately see that a good reward

communication strategy gives us a workforce that believes their employer delivers on its promises to employees, and

motivates staff to stay. In addition, we can see that when employees clearly understand how their pay and rewards

are determined, staff are focused on achieving goals, and feel that their performance has a significant impact on their

pay’ notes Ashworth.

The results are clear, by effectively communicating their reward strategy to employees, organisations can reap all the

benefits associated with increasing levels of reward AND provide employees with a much better understanding that

their pay is linked to performance. 

Whilst effective communication of reward strategies would have cost implications in terms of time and resources, it

would certainly cost less than an average $6,000 per employee. It is clear that driving pay satisfaction through

increased remuneration is a very expensive process, and fails to emphasise to employees the importance of

performance.” summarises Ashworth.

Key Takeaways:

Employees who perceive their pay to be fair view their organisation positively and are less likely to leave.

Driving this positive perception of pay through higher pay levels carries a higher financial cost, and for some

organisations the linkage may not even be strong, meaning increasing levels of pay may have little impact.

Communicating reward well to employees provides the same benefit to the organisation as increasing the

level of their pay, in addition to emphasising the importance of performance on their pay level.


About Aon Hewitt

Aon Hewitt is the global leader in human capital consulting and outsourcing solutions.  The company partners with

organisations to solve their most complex benefits, talent and related financial challenges, and improve business

performance.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to

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