How to Achieve - and Maintain - Pay Equity
Photo: Giorgio Trovato
With the current "war on talent," employers need to do all they can to retain their top employees. Many are looking at compensation with the intent of ensuring pay is equitable across men and women. To get to true pay equity, however, you need to take a deeper look:
Look at compensation by gender, race and all other diversity dimensions you track. Pay differentials come out not only between men and women, but also within each gender by race, as well as by sexual orientation, disability and more.
Review total compensation. For full time salaried employees this is where the biggest differences emerge, especially above the Manager level, and the compounding effect over the course of an employee's career can create a huge variance. This should include cash bonus and stock options as well as the value of other benefits.
Be sure to analyze the leveling of employees. This is where historically promoting one group of employees based on potential versus another based on proven experience has a direct impact on pay. Within a pay band you may be equal, but if you're not promoting or hiring equally into that pay band you are not providing an equitable workplace.
Incorporate pay equity reviews into your annual review cycle. As you hire, promote and expand your business it is easy for pay to become misaligned again. Incorporating this into your ongoing review processes will ensure you stay aligned and continue to demonstrate how much you value your employee's contribution.
Michelle's mission is to help companies create equitable workplaces. She is the Founder and CEO of Equity At Work, helping leaders achieve major impact through their diversity, inclusion and equity work. Follow her on LinkedIn and Twitter.