Dive Brief:

• Only 20% of today's workforce say they understand how their employer determines pay, according to Payscale, a compensation research firm.
• In an article at CNBC.com, writer Stacy Rapacon says more than ever, employers need to do a better job of explaining and managing their compensation policies, as well as work to keep employees satisfied while maintaining profitability.
• Rapacon reports that Payscale, at a recent webinar for primarily attended by HR leaders, debunked a number of commonly held misconceptions about compensation.

Dive Insight:

For example, one such myth is that employers save money by underpaying employees. That's just not true, Tim Low, PayScale's senior vice president of marketing, said during the Webinar. Actually, he said, paying employees less than fair value risks an expensive turnover boost. Apart from the high cost of added turnover, employee morale often is affected when good employees leave.

"Counting coins and paying pennies didn't work for Scrooge, and it won't work for you," said Aubrey Bach, senior manager of editorial marketing at PayScale, during the webinar.

Another myth explored at the Payscale webinar: "Talking to employees about pay will incite a riot."

Instead, Payscale found that if employers are open about compensation policies, employees will be more understanding. In PayScale's survey of 71,000 employees, in fact, 82% reported that they were "satisfied with their jobs" (even if their pay was below average) when employers clearly communicated why they offer lower paychecks for similar jobs.