The View | Average pay, CEO perks and bonuses – today’s hornets’ nest

How much are you being paid? I presume most readers would prefer not to answer but in any given organization there is intense curiosity over how much colleagues receive and there is often a sense of grievance that emanates not so much from the pay level per se but from comparative pay levels between colleagues.

In my experience people are willing to accept pay levels that are well below their expectation if they sense that they are paid at roughly the same rate as colleagues doing similar jobs. Discontent mounts when it is discovered that some employees are paid more for doing the same job.

However pay is also very much seen as a measure of a person’s worth – this may be nonsense but it is definitely the case. Thus every organization contains employees who believe they are worth more than others and they get most agitated when they discover that they receive the same remuneration as those they consider to be less worthy.

Pay, in other words, is an employment nightmare and the nightmare deepens when supposedly confidential pay rates of other employees becomes known, something that often happens, producing consequences we are all familiar with.

In companies that pay performance or goal-related bonuses, the relative levels of these bonuses are a subject of intense interest and, in many cases, provoke outbursts of serious discontent for the losers and triumphal behaviour by the winners. In the finance sector where bonuses often exceed basic pay levels there is no shortage of loud mouths keen to broadcast how much they have been given and when they do so all hell lets loose.

It is argued that there is some science to pay levels, indeed what are now called human resource managers (an insulting term if ever there was one) go on courses designed to teach this science. The reality however is that pay levels are established by a variety of methods, which obviously include consideration of the value of an employee’s contribution but must also take account of affordability, from the company’s point of view, and then there are a whole of host of other factors that may include a person’s likability, their relationship with other employees and, of course, prevailing pay trends in the market.