Equitable compensation isn’t just fair, it’s a key driver of employee wellbeing, staff motivation, and satisfaction too. Conversely, unfair pay practices directly contradict international non-government organizations’ (INGOs) social and moral mission and values and may undermine project success. Recognizing that pay is a visible manifestation of inequality, it is increasingly part of broader discussions around diversity, equity, and inclusion (DEI) and the movement towards equitable development.
Partnering to advance equitable compensation
Recognizing its significance, Humentum and Project Fair collaborated to create the Equitable Compensation Playbook. This initiative leveraged 18 months of work by Humentum’s compensation working group, infused with expertise from Project Fair’s 17+ years of experience researching fair reward.
Based at the University of Edinburgh Business School, UK, Project Fair aims to bring together INGOs on key issues related to fairness, specifically fair pay, to draw out research-based insights and evidence about paying fairly within the INGO sector. Humentum focuses on strengthening operations to bridge the gap between strategy and action, leading to improved outcomes for individuals, organizations, and the sector. Humentum has decades of experience convening members from more than 1,000 international and national organizations. This natural partnership allowed for an to address the pressing challenge of fair pay.
This emphasis on equitable compensation reflects an increasing interest in equity as individuals and organizations become more aware of biases and inequitable practices. The rise in global recruitment and proximate leadership, coupled with the movement towards locally-led development, has meant that traditional reward structures are being questioned. Perception of pay is one of the first indicators of how employees feel and whether change is needed within an organization.
Addressing challenges in equity
Navigating equitable compensation can be challenging because there isn’t a one-size-fits-all solution. What is considered fair depends on organizational context, characteristics, and how staff groups are defined (and why). For example – as INGOs prioritize global recruitment practices, they are faced with deciding which compensation approach to apply for senior leadership or staff living in the global south. If they are paid using a location-based approach, is it fair that their colleagues doing similar work living in the global north are getting paid more? And yet, if they are paid using a role-based approach, is it fair to the impact on the local labor market? At times, there is no way to square the circle on fairness.
Navigating fair compensation practices
So, what steps can INGOs take to address these challenges? The Equitable Compensation Playbook offers a framework for INGOs to assess and update their approach to compensation and reward strategies. The Playbook comes in two parts. The slides provide background information and links to existing resources to help think through key strategic decisions. The worksheet serves as a practical tool, allowing organizations to articulate how these key strategic aspects work while identifying potential adjustments.
Important factors to consider:
- Have an institutional philosophy and approach. Thoughtfulness, clarity, and consistency are key when communicating about compensation and reward. This means INGOs need to develop their own philosophy on fairness – in the example above, what would fairness look like in your organization? Then, transparently and consistently apply the philosophy in words and actions. Use the Project Fair Principles and Standards of INGO Fair Reward as a starting point.
- Understand your existing reward system. Use the tools in the Playbook to walk through the strategic and practical considerations underpinning your existing system. Project Fair research has identified three key strategic considerations:
- Think about how your people are categorized. Do you structure jobs as expatriate/international and local/national. Why? Make sure you can justify how your organization is structured.
- Focus on paying for the job, not the person. Shift away from paying people for their passport type and center your practices on the job role.
- Look beyond the cash components and instead to the total reward package. If salary is equitable but benefits are misaligned, feelings of unfairness will still exist.
- Assess what is working and what is not (using the approaches framework and worksheet).
- Reimagine what is possible, recognizing that change is incremental and will take time.
The Equitable Compensation Playbook can be used to advance your organization’s compensation approaches. We hope this tool is helpful to our partners and the wider sector. Please share it with others!
Download the Equitable Compensation Playbook
Dr. Ishbel McWha-Hermann is an Associate Professor in international HRM at the University of Edinburgh Business School, Scotland. She studies social justice at work, particularly for marginalized and vulnerable workers, and in international work contexts. Ishbel is Founder and Director of Project Fair, which brings together HR and reward managers from INGOs, to develop research based pathways to fairer reward policies and practices. She has undertaken consultancy and provided expert advice to numerous international organizations, including the United Nations.
Kim Kucinskas is the Technical Director, Organizational Transformation at Humentum. She helps individuals and organizations on a journey towards greater equity identify, understand, and operationalize transformation. She is the Project Director of the TIME (Transforming INGO Models for Equity) initiative, a case study in action of power shift. Kim’s priority is to support individuals to be more effective in their work and organizations to be prepared for the future. To achieve results, she creates connections between strategy and practical operations by building networks, facilitates co-creation, and supports organizations through consultancies.