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    2.3. Explain The Reasons (Two) For Treating Employees Fairly in Relation To Pay (2.3.) - Refacut

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    2.3. Explain The Reasons (Two) For Treating Employees Fairly in Relation To Pay (2.3.) - Refacut

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    CIPD MER 5

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    2.3. Explain The Reasons (Two) For Treating Employees Fairly in Relation To Pay (2.3.) - Refacut

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    2.3. Explain the reasons (two) for treating employees fairly in relation to pay (2.3.

    ) – refacut

    2.3. The transparency and equity of pay systems says a lot about an organisation’s values and ways of
    operating. Fair and non-discriminatory pay systems are a legal requirement and good management
    practice.  

     Pay is a factor with direct impact on motivation and work relationships.

    As per UK legislation (Equality Act 2010, Equal Pay Act 1970) the employer has to ensure equal pay
    systems. This means that employees that are carrying out equal work will be equally paid. Equal pay
    must be provided for the men or women that are doing equal work. Equal pay negatively impacts the
    psychological contract. Equal pay is part of organizational corporate social responsibility.

    By ensuring equal and fair pay HP can increase efficiency, productivity because it will help to attract
    proper employees, diminish staff turnover, increase engagement and decrease absenteeism. Failing to
    ensure equal pay could lead to legal claims (that are costly and time-consuming), reputational risk and
    ultimately affect the commercial success.

    Therefore, developing pay arrangements that are right for the organisation and reward fairly all
    employees by providing equal pay to equal work should be a key activity for any serious employer.

    Source: https://www.equalityhumanrights.com/en/advice-and-guidance/why-equal-pay-important

     Minimum wage. The UK government established a minimum amount you must get paid on
    average for the worked hours. This is called the National Minimum Wage (NMW) or the National
    Living Wage (NLW) if you’re aged 25 or over. If he organisation fails to ensure pay at at least
    NMW this can lead to a serious non-compliance case that is tried in a crown court, which has the
    power to impose unlimited penalty. Source: CIPD Manual pag 416

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