While pay equity as a concept is fairly old, its context has continued to evolve with time. Originally leveraged as a tool to combat the adverse impact of unequal pay between people of varying social classes and backgrounds, it is now the de facto term to address gender pay disparity.
India has had a good track record for labour laws containing wage-related legislations – like the Minimum Wages Act, 1948 and the Equal Remuneration Act, 1976. These were framed to provide social security and fair employment conditions to prevent discrimination amongst skilled and unskilled labourers and disparity between wages paid to male and female workers. Now, however, a prominent struggle for women to get equal pay has become a rising voice in almost every industry. The glass ceiling women have been subjected to for a long time now faces significant opposition, especially since a large number of women now boast of equal levels of knowledge, skills and competency.
It is high time that the strategy makers don’t let this gap broaden, as pay equity has a high impact on the overall wellness and performance of the employee. Let’s take a deeper dive into the significance and importance of pay equity on employees and organisations:
#1 Job security
One item of critical consequence for pay equity is job security. It doesn’t take rocket science to ascertain that if employees are treated fairly and rewarded aptly in accordance to their output, they would want to continue working in the same organisation. The assurance of no disparity encourages employees to feel positive about their careers and the company. You’re effectively ensuring that job incumbents don’t go searching outside.
#2 Lowered stress
No prizes for guessing that employees will feel happier and more satisfied in their current endeavors if they are paid fairly. Pay equity isn’t a metric for evaluating costs, it’s a tool for encouraging employees to work to the best of their capabilities and not feel burdened because of excess work and less compensation. With no pay disparity, it is a fact that women will be able to earn better and lead a more stress-free and joyous life. Having a job that is fair on this factor is certainly a good opportunity that no one would want to miss.
#3 Talent Attraction
Looking to bring in (and retain) top talent? It’d certainly help if your organisation was one known for its pay equity and fair compensation. Expect your team to share positive feedback on your company with others, and let word of mouth (or even formal recognition) help build your brand’s reputation on this aspect. The results will be quickly visible – both when you’re looking to hire for open positions, or when you receive regular applicants.
#4 Financial wellness
Out of all the reasons for continuing a job, one of the major reasons is financial wellness that comes with having a stable income. Stability in life is important and for most of us, a good-paying job is an essential way to reach a state of financial security and wellness in life. With pay disparity at bay, the entire workforce is likely to be a step closer in reaching their personal financial goals. From recreational activities to situations of emergency, financial aid is a necessity that can be best provided by the firm they work for.
#5 Higher growth prospects
With highly competent employees wanting to continue rendering their services, you can expect things to take a more favourable turn for your business. Engaged and committed employees, with the right training and development, are better positioned to graduate to higher-level managerial roles. This is a win-win for both them and the organisation, which can then skip having to scout outside when looking to expand.
#6 Higher competence and productivity
Appropriate compensation and good pay packages serve as an important link to productivity. Higher productivity is far more likely if employees have a fair chance of receiving the right appreciation and compensation for their work. With better productivity, there’s also a higher chance of skill enhancement.. So, the competency and the efficiency of employees increases which is a win-win situation for both.
Pay equity should be treated as a responsibility for bringing economic stability in the country and labour market. Pay disparity on gender biases needs to be stopped and for the company, assuring such aspects will fare well for retaining quality employees. A transparent and fair compensation scheme is important for the creation of a culture of growth.
For business prosperity, it is best to make the best use of employees. With pay equity you can retain and attract the best talent around that will help you to drive the business towards continuous success.