Sabina Shchehlova

O.H. Grosheleva, research supervisor

S.I. Kostrytska, language adviser
Dnipro University of Technology, Dnipro (Ukraine)
ESB Business School, Reutlingen University, Reutlingen (Germany)

Pay equity as a means of motivating employees and its importance for the
efficiency of organization

Motivation is an essential part of effective work. Employees who are interested

in quality work and their own professional development have a major influence on
the overall performance of the company. Employee motivation is a key part of the
human resources policy of an enterprise. It is implemented in order to reconcile the
interests of the company with those of its employees. The company is interested in
qualitative, productive and effective work of its staff. The employees have a vested
interest in the satisfaction of their needs. The more effective the motivation is, the
less staff flow and the more intensive the recruitment of new employees are.
Motivation is classified into tangible and intangible motivation. Non-material
motivation includes career development, involvement of employees in meetings with
management, social benefits packages, friendly atmosphere in the workplace etc.
Material motivation in turn is monetary and penalty system [1]. This study will look
at the importance of financial motivation of employees, why fair pay is an important
part of overall motivation and the issue of the gender gap.
In 2022, "Googlegeist" conducted an annual survey of Google workers
regarding salary satisfaction (Fig.1). According to the survey in 2022, 53% of
employees consider their pay to be competitive (in 2021 – 58%). In 2021, 64% of
respondents said their pay was "fair and equitable", and in 2022 the percentage is
56%. 56% of cloud storage workers said that their career development process was
fair and equitable in 2021, and in 2022 the percentage is 54% [2]. According to the
CNBC team, which analyzed the survey results, the biggest dissatisfaction was with
compensation and execution. Competitive pay is a major issue for all companies as
they all struggle to recruit and keep their employees.

54%
Promotional process is fair
56%

56%
The salary is fair and equitable
64%

53%
Salary is competitive
58%

0% 10% 20% 30% 40% 50% 60% 70%

2022 2021

Fig.1 Google staff satisfaction with pay

 Motivation affects the employees’ sustainable and long-lasting commitment.
Competitive pay and fair pay are not synonymous. Fair earnings are the ones
when the amount of pay increases in line with the amount of effort employees put in,
regardless of other factors. A positive ratio of pay to effort motivates them to work
better. Besides, fair pay is determined by management's equity in the employee and
the lack of gender segregation. Pay equity means that management appreciates
employees, regardless of gender, race, age or other demographic status. For example,
43% of American employees would leave their jobs, if they found out they were paid
less than their co-worker of a different gender or race doing the same job [3].
The gender pay gap is still a problem in the modern world, despite the fact that
humanity now stands for gender equality. This gap is measured as the difference
between the average gross hourly pay of men and women, calculated as a percentage
of the average gross hourly pay of men (without special payments) [4].
“Slovo i Dilo” has analyzed the data of the State Statistics Service of Ukraine
about full-time employees (Fig. 2). The results of the survey show that men's wages
have been consistently higher than women's wages [5]. The difference between men's
and women's wages is between 17% and 27%. An enterprise should create a positive
image for itself. This will attract good employees and potential investors for new
projects.

16000 30.0%

14000
25.0%
12000
20.0%
10000

8000 15.0%

6000
10.0%
4000
5.0%
2000

0 0.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

men women the difference

Fig.2 The average monthly pay of men and women in Ukraine

The results of the study show that fair pay plays a huge role in retaining a
company's workforce, increasing engagement, satisfaction and helping to reduce
brain drain. By fairly valuing the staff performance, the company creates an
encouragement for self-improvement of employees. This also gives the organization
an image of valuing its employees and rewarding them fairly, which boosts team
morale.
References:
1. Мотивація персоналу. Бухгалтерський облік, оподаткування. URL:
https://www.audit-it.ru/terms/trud/motivatsiya_personala.html (date of access:
28.04.2022).
2. Lodewick C. ‘Googlegeist’ survey reveals employees aren’t happy with
pay. FORTUNE. URL: https://fortune.com/2022/03/15/google-googlegeist-
survey-employees-unhappy-with-pay/ (date of access: 28.04.2022).
3. Job seeker nation survey. When Change is the Only Constant. JOBVITE. p 22
URL: https://www.jobvite.com/wp-content/uploads/2020/05/FINAL-Jobvite-
JobSeekerNation-Report1_5-11.pdf (date of access: 28.04.2022).
4. Gender Pay Gap. Federal Statistical Office.
URL: https://www.destatis.de/EN/Themes/Labour/Labour-Market/Quality-
Employment/Dimension1/1_5_GenderPayGap.html#:~:text=The%20gender
%20pay%20gap%20is,men%20(%20without%20special%20payments (date of
access: 28.04.2022).
5. Гендерний розрив в оплаті праці: як відрізняється середня зарплата жінок і
чоловіків в Україні. Слово і Діло.
URL: https://www.slovoidilo.ua/2021/06/10/infografika/suspilstvo/hendernyj-
rozryv-oplati-praczi-yak-vidriznyayetsya-serednya-zarplata-zhinok-cholovikiv-
ukrayini (date of access:28.04.2022).