While recent data suggests employers willconsider job-hoppers, they're not so happy when top talentdecides to hop to greener pastures.

Towers Watson has been chronicling talent management as theeconomy picks up steam. In late July, it reported that largeemployers were concerned about the twin difficulties inlanding top guns and hanging on to the ones they alreadyhad.

Many of their recruitment/retention woes would disappear ifthese employers simply paid more attention to what they pay peopleand how they decide what to pay, according to a Towers Watsonstudy.

Key findings include:

• 50% of employees believed they are not paid fairly compared with other people in similar positionsin their organizations;
• 41% said their company does not do a good job of explainingtheir pay programs;
• 60% reported they can distinguish no clear link betweenpay and performance, which means that a strong majority ofemployees don't see a logical link between the two; and
• 50% said their managers are not effective at fairly reflectingperformance in their pay decisions.

Not surprisingly, the survey (which gathered information frommore than 1,000 respondents) showed that many managers are cluelessabout this perceived lack of pay equity among the ranks.

For instance, 61% of managers said employees understand howtheir annual bonuses are determined and 53% said that managersexecute their annual incentive programs well.

However, 65% admitted that their employees do not understand howbase pay is determined. And only 38% of responding managersbelieved that they execute their base programs well.

Managers in general are trying to reward their top guns moregenerously than their average performers. Towers Watson data showthat highly rated employees got an average salary increase of 4.5%this year, compared to the 2.6% hike given to middle performers.But even that differential is down from three years ago, TowersWatson noted.

“Pay really matters to employees when they make decisions aboutwhether to join or stay with a company,” said Laura Sejen, managingdirector, Rewards, at Towers Watson. “But simply offering acompetitive salary and annual bonus is not enough to win the warfor talent. Employees believe that employers are falling short inhow pay decisions are made and that there is much room forimprovement.

“Despite awarding better-than-target bonuses and higher meritincreases to their best performers, many companies are still notproviding enough differentiation in their incentive programs forthem to be effective,” she continued.