As businesses worldwide strive to create inclusive and equitable work environments, transparent compensation practices are fast emerging as the cornerstone of organisational culture. These practices are now playing a significant role in attracting and retaining top talent across industries. The People Matters TechHR Pulse Mumbai 2025, held on February 5, convened industry leaders to explore the implications, complexities and increasing importance of implementing pay transparency. The discussion provided valuable insights into how organisations can navigate this evolving landscape to foster trust and engagement.  

Moderated by Jyoti Singh, GM-HR at GreytHR, the panel featured Priti Singh, Chief People Officer and Board Member at Universal Sompo General Insurance Co. Ltd., Poonam Davre, Head of Talent Management & Total Rewards at Adani Airport Holdings, and Shivin Tikoo, CHRO at Mahindra First Choice Wheels Limited. The discussion delved into real-world challenges and solutions for implementing pay transparency. Here are the key takeaways from this insightful session.

Why pay transparency matters: Keeping up with employee expectations?  

The discussion kicked off with the leaders decoding the factors driving the push for pay transparency in organisations. Priti Singh, Chief People Officer and Board Member at Universal Sompo General Insurance Co. Ltd. highlighted that pay transparency is fundamentally about fostering trust and equity within an organisation. By making compensation decisions transparent, organisations can demonstrate a commitment to fairness and help eliminate biases that might otherwise influence these decisions. She further added that much of her work has revolved around understanding and catering to the expectations of millennials, who place a high value on transparency. Millennials tend to make career decisions based on what they stand to gain, and the clarity around pay is a crucial factor in this. Offering a transparent and clear view of compensation structures, including base salaries, bonuses, and benefits, helps employees make more informed decisions about their careers. By doing so, companies not only attract top talent but also keep existing employees engaged and motivated.

Aligning pay transparency with organisational values

Shifting the focus towards alignment with company values, Shivin Tikoo, CHRO at Mahindra First Choice Wheels Limited explained how organisations can ensure that pay transparency aligns with their core principles. He highlighted the importance of defining what pay transparency means within the context of the organisation. For any such initiative to succeed, it’s vital to first establish a clear understanding of what the company wants to achieve with pay transparency and how it will measure success.

He further pointed out that different companies may have varying philosophies around performance management and compensation. Some organisations, for example, still follow a bell curve system for performance reviews, where pay increments are linked to performance ratings. Others might use a more flexible approach that takes into account high performers or potential employees. The key, he added, is to ensure that the rules governing these systems are clear and consistent across the organisation and that the approach is aligned with the organisation's values, such as collaboration and fairness.

Measuring complex and intangible workplace performance indicators becomes important to ensure that everyone understands the rules of the playbook clearly and can successfully deliver results according to set expectations. For pay transparency to work, organisations must have clear and consistent rules that guide performance assessments and compensation decisions. These rules should be communicated to all employees to ensure that they understand how compensation is linked to their performance. 

Addressing cultural sensitivity and legal complexities

Poonam Davre, Head of Talent Management & Total Rewards at Adani Airport Holdings addressed the cultural and legal complexities that come into play when implementing pay transparency. Compensation is a highly sensitive topic, with individuals having varied perspectives on what is considered fair or equitable. While some organisations may be ready to embrace full transparency in compensation, others are taking a more cautious approach.

She explained that organisations are currently at different stages of adopting pay transparency. For example, at the entry-level or when recruiting campus talent, they may feel comfortable sharing pay ranges upfront. However, when it comes to senior-level hires or current employees, companies tend to be more guarded. In these cases, organisations may adopt a neutral approach to compensation decisions to promote fairness and minimise potential biases. This caution can stem from the risk of creating frustration or confusion among employees.

Furthermore, Davre also highlighted the importance of preparing people leaders and HR teams to handle pay transparency effectively. Ensuring that team managers and leaders are well-versed in the organisation’s compensation philosophy and can communicate it clearly to employees is crucial for the effective implementation of pay transparency policies. She emphasised that this communication needs to be transparent, yet sensitive to individual concerns and perceptions.

Communication: The key to successful pay transparency initiatives

Jyoti Singh, GM-HR at GreytHR raised an important question regarding how to communicate pay transparency effectively without causing confusion or resentment among employees. Poonam Davre stressed that effective communication transparency in pay structures is not just about sharing salary numbers; it also involves helping employees understand the rationale behind compensation decisions. She illustrated this with an example: when employees receive their pay increments, they often want to know why they are receiving a certain amount and what factors influenced that decision. There is a clear need for organisations to explain how inflation, performance ratings, or market conditions affect salary adjustments. Providing this context helps employees understand the decision-making process, prevents misunderstanding, and fosters trust.

Priti Singh also echoed this sentiment, emphasising the importance of providing employees with a clear understanding of compensation structures and the factors influencing decisions. She suggested that organisations can share compensation data transparently, especially when it comes to performance ratings and expected salary progression so that employees understand the criteria used to determine their pay.

The role of data and benchmarking in pay transparency

A significant aspect of pay transparency discussed by Priti Singh was the use of data in driving decision-making. She highlighted that compensation data should be driven by clear benchmarks, which can allow employees to see where they stand relative to the market. She shared an example from her own experience, where the organisation made compensation ranges available to employees. Employees could see the range of their roles and understand what they needed to achieve in terms of performance to move up in terms of compensation.

Sharing this kind of granular data not only ensures transparency but also creates accountability. Employees know exactly what they need to do to progress, and they can assess their performance against the benchmarks provided. This transparency also empowers employees to have more informed conversations about their compensation and career progression.

Navigating the future of pay transparency

As businesses continue to evolve and adapt to new ways of working, pay transparency will remain a key consideration in creating an equitable workplace. The insights shared by the panellists emphasised that while pay transparency offers significant benefits in terms of trust, employee satisfaction, and talent retention, it is not without its challenges. Clear communication, consistent policies, and the careful use of data will be essential to making pay transparency work effectively.

For pay transparency to become the norm, organisations must focus on building trust with employees and navigate the cultural and legal complexities with creativity to continuously refine their compensation practices. Ultimately, pay transparency is not a one-time initiative but an ongoing commitment that requires constant monitoring, adjustment, and communication. By embracing transparency and fostering open conversations around pay, organisations can create a more fair, inclusive and motivating workplace.