This question was answered in a recent article by Tomas Chamorro-Premuzic, professor of organizational psychology at University College London, and CEO of Hogan Assessment Systems, for the HR Magazine website. In his opinion, unequal pay doesn't have to be unfair. He offered the following points for consideration.
1. The best people require the best treatment
A fair approach doesn't mean treating everyone the same, but treating everyone as they deserve.
2. Companies often don't know their greatest talents
If a company doesn't measure performance, it can't even know its employees' potential. There's also the problem of talent measuring being based too much on the intuition of the evaluators or too influenced by company politics.
3. Money doesn't ensure job satisfaction
The correlation between salary and job satisfaction is almost zero. Although money is motivating to a certain extent, the resulting motivation won't last long. While we're able to strive for a promotion or a higher salary, even for years, the satisfaction of finally achieving it only lasts a few days.
4. Big salary differences aren't good for teams
The best individuals perform best when paid significantly higher than their colleagues. At the same time, however, they demoralize their team and it lowers their performance. Teams with fewer differences in salaries are more generally consistent and perform better.
5. There will always be some dissatisfied people
Even if your company's reward system is as transparent, sensitive and data-based as possible, you can never please everyone.
Tomas Chamorro-Premuzic recommends first identifying the best talents in your company and then making sure they feel sufficiently appreciated. If not, they'll soon leave. It's not a perfect solution, but it's the best possible alternative at the moment.
-kk-