Home > Subjects > Pay and reward > General

Reward and diversity: making fair pay add up to business advantage

A summary of the CIPD Executive Briefing

The executive briefing, written by Sally Brett, uses research findings to demonstrate how employers can reward people fairly so that they can achieve the added value a diverse workforce can bring to business performance. It is available to purchase online – please visit our bookstore for more details and to find out how to order.

• Go to the CIPD Bookstore

Despite three decades of equal pay legislation and independent investigations by various organisations the gap between the average earnings of men and women remains stubbornly high. Figures from the Office for National Statistics reveal that in 2005 the gap for full time employees was 17.1 per cent, rising to 38.4 per cent for part-time employees.

Lack of progress in removing the gender pay gap appears to be due to many factors including complacency, fear of costs and ignorance generally about the importance of looking beyond figures and pay patterns to identify the underlying causes which perpetuate unjustifiable pay differences.

However, experience shows that this is a complex issue and there is no single solution or quick fix. Achieving fair reward for all employees is more challenging than addressing gender differences in pay and goes beyond number crunching and fixing discrepancies with money. The wider diversity agenda is complex and creating an inclusive workplace, in which everyone feels valued, demands employers’ attention in order to enhance the added value people make to business performance, not just to comply with the law.

How this book will help you

To inform progress on equal pay the CIPD has commissioned research from Incomes Data Services (IDS) to find out about employers’ experiences and what approaches are needed to deliver success.

The research, Reward and diversity: making fair pay add up to business advantage, based on in-depth interviews with a number of diverse organisations, such as Shell UK and BT, is designed to help diversity and reward practitioners to appreciate more about each other’s specialisms and the inter-relationships between them.

All too often when reward and diversity practitioners work together they focus on the numerical data, having long discussions about what size of gender pay gap is good or bad and whether or not the reasons are justified or unjustified under equal pay legislation. During the review they often fail to examine the underlying factors that lead to the existence of pay gaps (such as occupational or vertical segregation) and either forget or ignore what the organisation is trying to achieve through its reward and diversity strategy.

The publication also explores how expectations of both the reward and diversity functions have shifted in the past decade to become more strategic and supportive of business goals. Both now seek to engage an increasingly diverse workforce for good business reasons - and central to this is ensuring individuals receive fair reward and recognition for their work.

Brett, S (2006) Reward and diversity: making fair pay add up to business advantage. Executive briefing. London: CIPD

• Go to the CIPD Bookstore