Salary Communication Policy And Its Impact On Employee Attitudes

The increasing external pressure for greater pay transparency in recent years poses major challenges for companies. Although the policy of greater transparency certainly generates many positive outcomes, it can have various negative consequences as well. This paper examines the various outcomes of pay communication measures implemented by Croatian companies regarding the key employee attitude indicators resulting from the reward system – work engagement, employee retention and employee absenteeism. Specifically, a survey was conducted using a questionnaire among a sample of 61 medium and large companies. The research found that salary information is predominantly communicated verbally to employees by a line manager. More than half of organisations have a policy of confidentiality or non-disclosure of salary, while less than a tenth of organisations actively publish all salary range information to make it as accessible as possible to all employees. In terms of the relationship between communication policies and various employee attitudes, the research findings show different results with regard to employee category.