With hybrid work flourishing and here to stay, employees are not only away from office but also remain in the dark about their wages. As pay transparency regulation gains momentum globally, human resources (HR) leaders acknowledge current levels of compensation transparency are low.

As many as 54% employees say that pay bands are known only by finance and HR, 25% of employees know the pay band for their job level, but only 9% have access to the pay band for the next level up.

These are the findings of an annual State of People Strategy report by Lattice, a people success platform that brings together all of the tools, workflows, and data needed to help business leaders develop engaged, high-performing employees and winning cultures.

And there will be increasing pressure on companies to change this, and quickly, it said.

Previous research from Lattice revealed that 67% of US employees and 64% of UK-based employees want more transparency from their companies about pay practices, while over half of employees across the US and the UK said that they want to know what everyone as their organisation is paid.

Connecting compensation & performance

With pay transparency on the rise and financial security top-of-mind for employees, clearly linking employee performance to their compensation has never been more important. HR leaders agree, but admit they aren't doing enough.

Around 83% of HR professionals believe compensation should be linked to performance,  yet 72% acknowledge they could improve efforts to link the two in employee evaluations, and 27% admit they need to do a lot more.

Putting in work here is worth it

Two-thirds of companies who reported a good or great connection between performance and compensation had more engaged workforces, while only 11% of companies with a weak or no comp-performance connection said the same, says the report.

Hybrid work is here to stay – and going better than we think

While headlines might highlight the continued push and pull between employees and organisations around returning to offices, the Lattice research underscored that hybrid and remote working policies will continue to dominate into 2023

Half of respondents expect to maintain a remote workforce of 50% or more over the next 12 months and nearly one in four expect to maintain a 90-100% remote workforce.

And there is evidence that hybrid work is working.

Companies with a 90% remote workforce reported being just as happy with manager-employee facetime as those with a 10% remote workforce. Of those with facetime concerns, engagement and culture, not productivity, emerged as the primary challenge.

DEIB top priority, bias in performance reviews top concern

DEIB surged in priority after a dip in 2021, rising from #6 to #4 on the priority list for People teams – with addressing bias in performance reviews emerging as a top concern.

Employee sentiment validates the urgency here. Around 51% of US employees felt there was bias in performance/compensation reviews, and nearly a third said their organisations weren't taking adequate steps to address it.

The 2023 State of People Report is based on an online survey that took place between July 20 and August 25, 2022, exploring the viewpoints of HR leaders around the globe.

Over 800 HR leaders from companies around the world weighed in this year, shedding light on where HR priorities have shifted, the trends behind high-performing teams, and the biggest challenges facing People teams as they work to retain and engage top talent amid economic uncertainty.