Is Your Compensation System Competitive?

Content Summary

The normative response when asking employees about their pay is that they feel underpaid. This is partially the result of cognitive bias. The tendency is for them to believe they are more competent and better performers than they are. After hearing numerous claims of being underpaid an organization may write them off as being self-serving. Yet research confirms we all are subject to feeling that way. We also tend to attribute success to our own efforts and failure to uncontrollable external causes. Finally, we will accept information that agrees with what we believe or wish to be true than information that conflicts with beliefs. So how does an organization evaluate the competitiveness of the compensation system? If it is found to be appropriately competitive how can employees be convinced?

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