Pay raises are a great economic indicator, signalling that business is healthy and employees are reaping the rewards for their hard work and contributions. And any of us who’ve been lucky enough to receive a pay raise know how deeply satisfying a part of our career journey it is, not to mention putting food on the table and paying the mortgage.
At TribeHR, we’re also interested in pay raises and their macro role in impacting a company’s workplace culture, as well as its hiring and retention potential. Today we’re introducing the TribeHR Pay Raise Index, a gauge of social HR health and opportunity, in order to get a snapshot of how workplaces are recognizing employees and doling out the dough.
To create the Index, we analyzed salary and workplace recognition (“kudos”) data from 20,000 employees at 2,200 small to medium-sized companies between Q1-Q3 2012. Our key research finding was that women are actually beating men when it comes to the number of raises being handed out. We determined that 7.4 percent of women received raises compared to only 6.2 percent of men.
When analyzing the size of these pay raises, however, it was clear that men are getting bigger raises than their female peers. In fact, men are three times more likely to earn a salary increase in excess of 25 percent. Looking at pay raises of 5 percent or more, 60 percent went to men and just 38 percent to women.
Fair pay? Not so much.
We were also keen to analyze the correlation between formal recognition for employee accomplishments and the likelihood of receiving a pay raise. Now, it would be natural to believe that kudos from a manager would up your chances of a raise. It turns out that this is not the case. According to our data, peers gave 85 percent of documented employee recognition, and it’s this peer-to-peer recognition that increases the likelihood of earning a pay raise (two to three times!).
Our chief takeaway: employee satisfaction and workplace culture play an increasingly large role in a business’ brand reputation. Those who pay fairly while amply recognizing employee contributions will reap the benefits when it comes to hiring and talent retention.
We created the following infographic to illuminate the findings of the first TribeHR Pay Raise Index:
To read today’s full press release, click here.