Seemingly, the issue of pay equity has been around forever. More than a half-century since passage of the historic Equal Pay Act, there remains a marked difference between what men and women are paid, even if they do comparable work.
The heat is on employers to do more. There’s increased media scrutiny, for one thing, which heightens risk. You also don’t want to unduly hurt your brand. In this tight labor market, it’s imperative that companies do everything possible to improve their ability to recruit and retain talent.
So, top executives and HR leaders are increasingly prioritizing equal pay equity and pay transparency. Governments, advocacy groups, investors, and employees are calling on employers to make sure that there’s pay parity in the work force.
The good news is that employees who are paid equitably are more productive, more committed, and more loyal to their employer, and will, mostly by word of mouth, help their employer’s reputation.
Here’s how to achieve pay equity in your organization.
What is Pay Equity?
Let’s start there. Basically, pay equity means paying employees the same when they perform the same or similar work duties, while factoring in things such as tenure, experience level, and job performance.
What Steps Can I Take?
There are measures you can take to make sure you’re compensating employees – all of them — the same way for the same work.
- Stop asking about salary histories. Continuing to do so serves to perpetuate gender-based pay discrimination by contributing to wage suppression as employees progress through jobs. That’s why some states have prohibited organizations from making such inquiries.
- Omit gender-biased terms from titles and job descriptions. Drop all gender-specific references or pronouns (foreman, for example). Instead, underscore work requirements and experience.
- Watch those screening questions. Yes, some screening queries are discriminatory. For instance, make sure you’re not unwittingly blocking female candidates by requiring education in historically male-dominated fields.
- Evaluate the organizational culture. Instituting equal pay requires you to first solve any structural issues that are damaging your culture. For instance, if all your top supervisors are white males, that doesn’t exactly send a message that you prioritize diversity. You should also be certain to include women in hiring decisions.
- Conduct a pay equity analysis. This will help you figure out whether any pay discrepancies exist. If you find pay differences that you can’t explain through seniority, experience, etc., you have an opportunity to put in place gender pay gap solutions.
The Mercer Approach
Speaking of pay analysis, leading consultant Mercer offers that as well as remediation to help drive organizational success by determining and resolving compensation inequities, mitigating risk, and enhancing diversity.
How does it pull this off? By clarifying disclosure requirements for countries and supporting mandatory audit processes, running numbers for local reporting then crafting templates for repeat use, and using analytics to review and manage global pay equity.
In terms of Mercer’s approach, the firm combines consulting and technology so that it can pair its statistical expertise with your knowledge of your pay system and employee situation.
Regarding analysis, Mercer offers a host of statisticians, psychologists, and economists who bring to bear their expertise and applied knowledge.
What’s more, Mercer has a unique web-based instrument called a Pay Equity Calculator that can help your organization explore areas of possible risk and review pay gaps. The tool also allows for the testing of a variety of adjustment strategies and develops tailored strategies for specific groups. It also assesses the effect of actions on pay gaps and budgets.
Now that you know how to achieve pay equity, you can go about solving any issues at your organization and putting in place a long-term program that will prevent future issues, while enhancing your ability to attract and recruit.