CIPD calls on Government to make clear the business case for Equal Pay Reviews

23 January 2009

Today as the Equal Pay and Flexible Working Bill has its second reading in the House of Lords, the Chartered Institute of Personnel and Development (CIPD) has called for a more concerted effort from government to promote the business benefits of Equal Pay practices.

Charles Cotton, CIPD’s Reward Adviser: “There are clear business benefits to conducting Equal Pay Reviews (EPR), but there is a lack of understanding amongst employers as to what those benefits are.

“Employees who feel unfairly treated are unlikely to be engaged and motivated to help the business succeed. Conversely, well-informed, fairly-treated employees are more likely to be powerful advocates and motivated contributors to the future success of their companies.

“Particularly, in economic conditions such as these, it is crucial that employers can see how linking employee contribution to pay ensures they are not wasting limited financial resources.

“Our forthcoming 2009 Reward Management Survey shows that only 54% of employers have conducted or are intending to conduct an EPR, with the majority of these in the public sector. The government should do more to promote the business benefits to the private sector of voluntarily conducting such audits rather than making them mandatory. Mandatory systems often become box-ticking exercises with an employer in a compliance mind-set, focusing on minimal solutions to the symptoms rather than meaningful action to address causes and change cultures.

“We also call on the government to implement proposals to outlaw gagging clauses banning employees discussing their pay with colleagues. Pay transparency cannot only encourage pay equality, but also is vital for staff motivation and solid employee engagement.”

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