Written by: Morag Phillips and Martin Hopkins What does fair pay really mean? I imagine that if you asked a group what “fair pay” means, you’ll have a collection of views. If you then asked a group what “fair parenting” means, you’ll have another collection of views. The concept of fairness seems to rest partly in our own experience of the matter under consideration, and it seems that it is very tainted by our own comparison of the application in our immediate context. To step out of pay for a while into the parenting world, a sibling that was allowed to have a smartphone at age 15 may deem it unfair when a much younger sibling received their smartphone at age 12. The sense of outrage that comes with an experience of unfairness makes it a burning issue. It burns brightly when it’s happening to us! Fairness itself does not inherently have a bias. The concept of fairness revolves around treating all individuals or groups impartially and without favouritism or discrimination. It aims to ensure that decisions, processes, or outcomes are reasonable, justifiable, and consistent. Fairness typically refers to the quality of being reasonable and impartial. It involves ensuring that decisions or actions are consistent, unbiased, and considerate of all relevant factors. Fairness often focuses on the process or procedure by which decisions are made rather than the outcomes themselves. For example, in a decision-making context, fairness might mean giving everyone an equal opportunity to voice their opinions or ensuring that rules are applied consistently to all individuals. So is it fair that both siblings got a Smartphone? Does the timing make it different? Managing pay practices with a focus on fairness, justice, equity, and equality involves understanding each concept distinctly and designing a pay structure that balances these principles. Here’s a breakdown of each concept and how they relate to pay management:
Let’s add 2 more important concepts…
We could ask which factor should be considered the most important. It is indeed possible that pursuit of one element may mean we don’t achieve the other. In this example, we could say there is fairness, but not justice: Imagine a scenario where a company needs to downsize due to financial difficulties. The company decides to retrench employees based solely on tenure, meaning those who have been with the company the shortest amount of time is let go first. This decision might be considered fair because it applies the same criteria (tenure) to all employees without discrimination. However, it may not be just if some employees who are newer have made significant contributions or have higher performance ratings compared to longer-tenured employees who are retained. In this case, fairness in terms of consistent application of criteria (tenure) is maintained, but justice may be lacking because deserving employees are being retrenched based on a criterion that does not necessarily reflect their value or contributions to the organisation. This demonstrates that fairness and justice are distinct concepts that can sometimes conflict with each other depending on the context and the specific criteria or principles being applied. Achieving both fairness and justice often requires careful consideration of both the processes used to arrive at decisions and the outcomes that result from those decisions, taking into account relevant ethical, moral, and contextual factors. To design a pay structure that integrates fairness, justice, equity, and equality, managers can consider the following strategies and practical tools:
In summary, while fairness focuses on the fairness of procedures and decision-making, equity assesses whether those procedures result in fair and just outcomes. Together, fairness and equity aim to promote a more just and equitable society or organisation where everyone has equal opportunities and access to resources based on their circumstances and contributions. As we close, a challenge to our industry is to see the determination of an organisation-specific living wage as a decision sparked by justice, supported by fair policy, and resulting in an equitable outcome. Morag Phillips is a Master Reward Specialist, a SARA Executive Committee member, Chair of the SARA Thought Leadership Committee, and a member of the SARA Conference and Reward Awards Committee. Martin Hopkins is a Master Reward Specialist, and a member of the SARA Thought Leadership Committee, and Head of Reward Advisory Services at Bowmans Law. ENDS MEDIA CONTACT: Idele Prinsloo, [email protected], 082 573 9219, www.atthatpoint.co.za For more information on SARA please visit: Website: www.sara.co.za Twitter: @SA_reward LinkedIn: South African Reward Association Facebook: SARA – South African Reward Association
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