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27/02/2017
All organisations should possess the data required to calculate pay ratios between their top executives and lower-paid employees, according to a report from the High Pay Centre. Written by Paul Marsland, Deputy Director of the High Pay Centre, the report says: ‘This is data they should have, and calculating the ratio ought not to challenge anybody with a decent pass in “O” level/GCSE maths.’
However, it accepts that outsourcing staff and the growing use of zero hours contracts can distort calculations, adding that companies should use clear and consistent employee-group comparators. Yet it remains the case, the High Pay Centre says, that no additional costs need be incurred by UK companies to produce a pay ratio figure.
The report concludes:
‘Give shame a chance: some of the opposition to pay ratios obscures a fear amongst employers of having to justify pay differentials between those at the top of a company and the rest of the workforce by reference to objective criteria. But public companies should be able to justify how pay levels are set.’