When attracting and retaining talent in your organisation, the culture you cultivate as a leader is essential. Creating an environment where employees can trust leaders and management is crucial to enhancing employee satisfaction and organisational appeal. 

Pay transparency will be increasingly in demand in 2023. Gen Z is spearheading the expectations for upfront honesty regarding salaries and clarity about potential career progression. This is not about sharing salaries but giving employees context around how pay decisions are made and demonstrating that the process is fair and consistent.

So, how can leaders build a culture of trust through pay transparency?

Start with pay

In a recent study conducted by 3R Strategy, 59% of organisations claimed to use salary ranges, yet of this percentage, only 24% chose to publish them. This varied across sectors but raises important questions about why so many organisations are still not clearly communicating pay practices with employees and job seekers. 

A PayScale survey found one of the top predictors of employee engagement is an organisation’s ability to communicate clearly and honestly about pay. Even when employees were paid below the market rate, the survey showed job satisfaction numbers more than doubled if someone talked to them about pay and explained why. It clearly demonstrates the importance of honesty and trust to employees. 

Develop career path visibility

Career path potential is another area where employees really appreciate a clear and honest framework showing them what they can achieve and how to get there. While pay transparency is key, the wider culture of the organisation needs to mirror this transparency. 

A job-levelling framework can help leaders respond to employee needs and sets clear expectations and career-path visibility. Employees want to know where they stand within an organisation and how they can progress. Creating a culture of secrecy or awkwardness around these conversations can make employees feel less secure and engaged. Job levelling offers an explicit route forward so employees can aspire to their next role.

Even in a smaller organisation with fewer senior roles, career path visibility can still be implemented. 

Career progression doesn’t always mean moving into a more senior role; it could mean taking on larger, more challenging projects. Employees want to know what the future holds in their work and, if they decide to stay loyal to your organisation, where they could see themselves in the future. What are the desired behaviours in your organisation, and what important outcomes are you seeking from employees? These must be clearly defined and shared throughout the company so that everyone understands what is expected and ideal.

Clarity on this will help cultivate a relationship of trust and boost engagement and loyalty. 

Remember that pay is only part of the puzzle 

Feeling valued and appreciated at work is key to employee engagement, and building a culture where recognition of achievement is standard practice is key to creating a positive workplace culture. 

Formal recognition events are great for boosting team morale, whether that be monthly, quarterly or yearly awards for achievements or desired behaviour. Less formal forms of recognition are also key in the day-to-day working environment. Effective recognition can range from a thank you after a productive meeting or applauding someone for a piece of work and letting their manager know how pleased you are. 

Ensure recognition is always timely, meaningful and genuine. Being specific about what you appreciate and why someone has impressed you always creates the best feedback. 

Not only does the recipient of praise feel valued within your organisation, but giving praise also feels good to do. Communicating when someone has impressed you is beneficial for everyone involved.  

A culture of trust

When building a culture of trust, pay transparency is the ideal place to start, and aligning your culture accordingly from there is important. Adopting honest conversations and clear visibility for everyone over things such as salary and career progression will help create trust between management and teams and a shared understanding across the organisation about where everybody stands. 

When employees can clearly see the reasoning behind their pay, as well as how and why people progress within the organisation, then faith and conviction in the company will be enhanced. Remembering to make people feel valued on multiple levels and through the celebration of achievement will build a culture of trust that brings out the best in everyone.  

Rameez Kaleem is the founder and managing director at reward consultancy 3R Strategy, and author of A Case of the Mondays.