Conversations, pulse surveys, town halls — employers are more interested than ever in knowing how employees feel about company culture. Employee engagement teams design surveys, launch enterprise-wide initiatives, and track participation like participation itself is proof of a thriving culture. They carefully select questions about teamwork, leadership, and resources, and inevitably, the same two questions about compensation and career frameworks appear.
You've seen them:
I feel that I am paid fairly.
I feel that there are opportunities for advancement at this company.
Two loaded questions, emptied of context. Then comes the moment of truth: the survey data shows that employees have negative perspectives of compensation and career growth — even though HR knows their market data and structures are solid.
So, why the disconnect?
For most employers, "culture work" is an exercise in putting the cart before the horse. That's because employees can't accurately assess pay fairness or advancement potential if they don't understand the context at the center — and company culture suffers every time they have to guess.
Before launching another round of culture surveys, start with the culture of compensation.
What employees don’t know can hurt you
HR and compensation professionals have been trained for decades to protect the secrets of pay systems. Especially in highly regulated settings such as government agencies, those who work with pay structures usually do so “in the dark.” But studies show that leaving employees to guess on pay can undermine other areas of company culture, such as employee satisfaction and talent retention.
In a Glassdoor study of employee-reported salaries and employer reviews from 2018 to 2026, researchers found that “well-compensated” employees were 10% more likely to be satisfied with their jobs than “under-compensated” employees in the same roles. Further, the study found that “under-compensated” employees who were satisfied with their employers still engaged in job searching activities 8% more often than satisfied, “well-compensated” employees.
The connection is clear: perceptions of pay fairness have a greater impact on employees’ willingness to stay than company culture itself.
Ignorance is an invitation
Annual pay cycles can be a battleground for employers. Employees and people leaders alike use phrases like “dartboard magic” and “black box” to describe the decision-making process behind compensation. Where most employers fail is in their responses to these cries for help. They police Slack channels and re-send manager scripts to protect the messaging. But employees’ frustration isn’t an indictment; it’s ignorance — and ignorance is an invitation for education.
In a 2025 study conducted by Payscale, researchers found a direct correlation between perceptions of pay fairness and transparency. Unlike the Glassdoor study, Payscale’s study used market data to show that even when pay truly is competitive, employees are less satisfied with their pay when they don't know it's competitive.
Thus, the ultimate goal is not to pay more but to educate more.
Pay transparency is the floor — culture requires more
Most employers focus on the legal compliance aspect of pay transparency, but culture work can’t stop there. While pay transparency legislation has done its job to improve overall pay fairness in the US, it hasn't eliminated the behind-the-scenes string-pulling that often comes with pay decisions. With increasing frequency, employees are rejecting the status quo and demanding more access to information. They find it difficult to trust culture to employers they don’t trust to be open about pay.
Employees are more engaged, more satisfied, and more likely to stay when they understand how pay decisions are made — not just when they can see the pay ranges. This is evidenced by the way existing employees react to posted ranges that exceed their own salaries in the same roles. When employers post ranges without doing the pre-work of educating employees or adjusting pay, the law is satisfied but culture suffers.
Transform culture through compensation literacy
Follow these three steps to transform compensation from a culture killer into a culture builder:
1. Design a compensation program that doesn't take an expert to understand. Many compensation programs are so complex and nuanced that only the compensation team understands them. That approach turns compensation into a bottleneck and everyone else into a point of failure. Instead, build simple salary structures, career pathways, and plain-language role descriptions that all employees, people leaders, and executives can understand.
2. Educate early and often. The worst thing an employer can do is hire an employee and then withhold essential training. The same is true for compensation. After designing a compensation program that employees can understand, teach it to them at all organizational levels. Provide resources for on-demand learning and live, one-to-one support. This empowers them to navigate your system instead of feeling controlled by it.
3. When you ask about culture, make sure you've done the work first. You think you're only asking about mission, vision, and relationships when you launch a culture survey. But employees view those things in the context of their long-term career and financial goals. So, before you ask another culture question, ask yourself one: Do our employees trust us to be open about pay? If the answer is no, resist the urge to force a culture conversation. Instead, build your pay literacy engine, so those compensation and career questions can carry their fair weight in your culture survey — no more and no less.
Conclusion
Culture work is worthwhile, and employers that sincerely and intentionally invest in it will reap the benefits of employee satisfaction and talent retention. But culture work that prioritizes the culture of compensation will reap the greatest benefit of all: trust.
About the author:
Angela M. Zachary, SHRM-CP, has over a decade of experience implementing compensation programs. She works on both sides of the system to establish shared pay literacy — leading compensation programs inside of organizations and training career coaches and job seekers on the outside. Angela developed The Culture of Compensation Framework to help organizations uncover and address the negative cultural impacts of incomplete and inconsistent compensation messaging.
