(Solution) CIPD Explain the reasons for treating employees fairly in relation to pay (AC5.3)

In UK context, legislations including the Equality Act 2010 demands the employers to offer pay to men and women in an equal basis to pursue similar roles/assigned functions (CIPD, 2023b). Failing in doing this can lead to staff being discriminated in grounds of sex or equality in pay claims for the employers. The identified claims could lead to compensation payments, negative image, damaged employer brand and cost intensive tribunal costs. For avoiding these occurrences, employers need to pursue regular-based pay auditing for ensuring pay differences are justified and not impacted by different protected characteristics including gender.

Fairness and Workplace Culture

Payment of employees in an unfair manner as opposed to the rest affect the culture and morale in working environment. This could contribute to resentment by the employees who are feeling not paid well. Unfairness in pay lead to undermining of employer inclusive and diversity strategies when specific groups feel bias as existing (ACAS, 2022). Reduced morale amongst underpaid staff could influence performance and an increased absenteeism and employees turnover increase. Conversely, a fair-based and transparency in pay structure assists fostering of goodwill and increase in loyalty amongst the entire staff (Begom, 2023). This increase morale and motivation levels hence an increase in performance, turnover reduced and harmony in workplace.