Pay — it’s not just about the number

You’re probably getting paid better than you think you are. If only you knew it. Whether our jobs pay us fairly matters a lot less to us than how well we feel we’re getting paid, a new survey has found — and because we’re in the dark about exactly why we’re paid what we are, most of us think we’re getting underpaid.

In reality, nearly 90 per cent of people who think they’re underpaid are actually getting at or near the market rate, according to a new survey by the US online salary database PayScale.

But people who think their employers are fair and transparent in how they determine pay are more likely to be happy at work than those actually paid the going rate for their jobs.

In its survey, PayScale collected salaries and corresponding market rates for the jobs of more than 500,000 people, then asked respondents to rate a series of statements — including ones about job satisfaction and employers’ pay transparency and fairness — on a scale of one to five.

The survey found that workers who were confident in the fairness and transparency of their employers’ pay processes were 5.4 times more likely to be highly satisfied with their jobs, compared with people paid a market rate .

“Companies are determining pay in this kind of behind-the-curtain way,” says Chris Martin, the lead data analyst at PayScale.

“Employees are forming opinions and think they are getting a raw deal.”

Some companies have examined their processes for setting remuneration and found pay gaps. Others have gone further, making all their employees’ pay completely public.

One such employer is Buffer, a social media management platform, which publishes salaries for anyone to see and explains what variables determine them with a pay calculator.

Still, the move to transparency has been limited. Just 6 per cent of the 7700 employers PayScale surveyed said they publish everyone’s salaries; a full half of all the employers said they tell employees only what’s on their paycheques.

Earlier this year, Citigroup shareholders voted with management and rejected a proposal to analyse and publicise the bank’s gender-pay gap.

The new survey findings suggest resistant employers have something to gain from demystifying what they pay their workers, says Martin: “this is a way for organisations to develop this deeper level of trust.”