The latest report on ‘The ethics of pay
in a fair society: what do executives think’ has shown that age has a lot to do
around with fair pay in a society, reports ITRealms.
According to PwC’s latest survey and
report, there is a significant inter-generational difference of opinion when it
comes to fair pay and what constitutes ethical behaviour around pay, with the
younger population wanting stronger protection for the less well-off, compared
to the older generation who are more likely to put faith in the effectiveness
of market outcomes to create a fairer society.
The analysis, ITRealms gathered was completed
in partnership with the London School of Economics, included a survey of 1,123
executives around the world, which showed that the data is remarkably
consistent across a range of demographic factors such as gender, territory and
earnings level.
In addition, the study says, age was one significant
differentiator, with those under 40 who were surveyed far more likely to
believe that distribution of wealth should lead to moral outcomes, with all
members of society receiving an income that is sufficient for them to lead a
dignified life.
By contrast, the over 50s believe talented people deserve to
receive income in line with their contribution and that market efficiency is
important in determining how income should be allocated.
For Advisory leader, PwC Nigeria, Dr Bert Odiaka, “Fairness
is a morally and politically loaded term and means different things to
different people. But questions about fairness, and the role companies have to
play in this, are not going away any time soon.
Demographic factors generally do not predict attitudes to fairness. But the major exception to this is age, with our survey revealing almost 50% of over-65s identified themselves most strongly with pro-market principles, while less than a third of under 35s did the same.
Demographic factors generally do not predict attitudes to fairness. But the major exception to this is age, with our survey revealing almost 50% of over-65s identified themselves most strongly with pro-market principles, while less than a third of under 35s did the same.
Also, he said, the findings demonstrated that there is no
single catch-all principle.
“Views of distributive justice are multidimensional and
complex. There is much more to fairness than equality. Companies must therefore
develop a much fuller narrative on what they mean by fairness and how they are
delivering on that for employees, or risk the debate being hijacked by a
one-dimensional view of fairness based on pay ratios,” Odiaka said.
Those surveyed, he pointed out, also did not subscribe to
the view that the role of companies is to make money and of the state to
redistribute it.
Instead, they thought that companies have a broadly equal
responsibility in providing a fair pay structure among their employees.
Companies are seen not to live outside of, but to be very much a part of,
society and are expected to act justly.
But companies, as well as societies, are not always living
up to people’s hopes of them. Typically a quarter to a third of people surveyed
feel that companies are not delivering principles of fairness that they deem to
be important.
For example, the principle around equal opportunity, where
market competition is seen as fair game, so long as there is a level playing
field, was the principle where there was the biggest gap between aspiration and
reality. 40 per cent of respondents consider equal opportunity to be important
but they did not consider the principle to be implemented in their society.
The Associate Director and Head People & Organisation
PwC Nigeria, Olusola Adewole, said of the study that “There is a tricky balance
to strike. Markets matter and companies that ignore the pay rates set by the
market risk becoming uncompetitive in terms of cost or quality of talent. But
at the same time, how companies operate across the developed world is being
challenged, and will become more so as automation takes its course.
“Fair pay and the ethics behind it, is an important part of
rebuilding trust in business. But there is also an opportunity to create a more
engaged workforce with benefits for long-term value and productivity. Companies
should therefore consider their perspectives on this debate and look to figure
out exactly what fairness means for them.”
Nonye Dom/GEE
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