based on what we have learned in this course, pay equity is best achieved through:

What is pay equity and why does it matter?

Pay equity is the concept of compensating employees who have similar job functions with comparably equal pay, regardless of their gender, race, ethnicity or other status. Yet, this practice is often more complex than simply eliminating biases.

Should companies adopt a pay equity framework for managing compensation?

To put a fine point on it, the companies that adopt a pay equity framework for managing compensation will be the most progressive employers in the country. Their leadership will define how companies put employees first, resulting in improved HR outcomes as employers of choice for talent looking for a new home.

How do you achieve pay equity?

Achieving pay equity requires an intentional, ongoing commitment to equal opportunity and fair compensation. These best practices are a good starting point, but it’s important to fine-tune your pay equity strategy to play to the strengths and opportunities of your organization.

Is pay equity more than just a compliance issue?

Increased social awareness and workplace transparency have made pay equity more than just a standard compliance issue for many businesses today.

How do you ensure pay equity?

If you're not sure where to start, or need some new ideas to continue making progress, these best practices can help.Never ask about a candidate's salary history. ... Tread lightly with asking about salary expectations, too. ... Build salary ranges. ... Discuss your commitment to pay equity. ... Address the opportunity gap.More items...•

What can be done to achieve equal pay?

Conduct a pay audit. Awareness is the first step to solving a problem. ... Ensure that hiring and promotions are fair. ... Make sure women have equal opportunities for advancement. ... Make it a norm for women to negotiate.

What is pay equity and why was it necessary?

Pay equity is a method of eliminating gender and race discrimination when establishing and maintaining wages. Still today, many workers are separated into various jobs which are historically underpaid because of their gender or race.

How is pay equity defined?

So what is pay equity? In general, it means compensating employees the same when they perform the same or similar job duties, while accounting for other factors, such as their experience level, job performance and tenure with the employer, explains Karen Denney, an attorney with Haynes and Boone in Fort Worth, Texas.

What is the first step in achieving equal pay?

Many people might not even be aware of the disparity in salary between men and women. It may sound simple, but awareness is the first step of action. In order for people to make a difference in closing the gender pay gap, they have to realize its far-reaching implications!

Why is equal pay for equal work important?

The Importance of Equal Pay Equal pay is essential because every worker deserves to have a voice and be properly represented and protected. All modern organizations have the responsibility to ensure that all of their workers are valued and provided with tools and resources to feel secure.

How do you promote pay equity in the workplace?

Publish and gain commitment for employee performance criteria. Offer Training and Other Accommodations: Offer management training, skills training, or other learning opportunities to all employees so that both women and men have the same opportunities for promotions. Support training programs for women in the trades.

Why equity is important in the workplace?

With equity, an organization will recognize that each employee has varying access to resources and privileges. And those with less access may need more support in order to take fair advantage of opportunities within a given company.

What is an example of pay equity?

“Equal pay for equal work” compares the pay of similar jobs, where women and men are doing the same work, for example: Comparing a female truck mechanic's pay to a male truck mechanic's pay; or, Comparing a female bank teller's pay to a male bank teller's pay.

What are the factors that relate to pay equity?

While it’s true that pay equity is about achieving equal pay for equal work, there’s more to it than just that. Employers must also weigh their emp...

What is the Equal Pay Act?

An amendment to the Fair Labor Standards Act, the Equal Pay Act prohibits wage discrimination based on gender. It covers all forms of compensation...

How is pay equity calculated?

The gender pay gap is generally estimated by dividing the median earnings of women by the median earnings of men and expressing the answer as a rat...

How do you ensure internal pay equity?

Achieving pay equity is a multi-faceted process that takes time and depending on internal resources, may require external help to be fully realized...

What is pay equity?

Pay equity is typically defined as equal pay for equal work regardless of a workers’ demographic group. That includes base pay, bonuses, overtime, benefits and advancement opportunities. Many equal pay laws have also expanded the pay equity definition to include work that is considered substantially similar. Pay equity also encompasses systemic issues, biases, social norms, educational opportunities and other factors that may lead workers in certain demographic classes to pursue higher-paying jobs.

Why is pay equity important?

By creating a workplace that promotes pay equity, you can attract a diverse workforce and reduce turnover. Providing equal pay for equal work may also help widen your labor pool and improve worker loyalty.

What was the pay equity movement in the 1980s?

The 1980s: The 1980s brought numerous lawsuits and workplace strikes, with employees fighting for pay equity . The decade also saw individual states undertaking pay equity studies, with some of those states making pay adjustments or passing relevant legislation.

Why is it important to remain compliant with state and local pay equity laws?

As an SMB, it’s also important to remain compliant with state and local pay equity laws to avoid equal-pay litigation brought about by workers. These cases have increased dramatically in recent years and often take the form of costly collective suits or class actions.

Why do employers need to initiate PEA?

As an employer, you may initiate a PEA to satisfy shareholder demands or to ensure compliance with federal, state or local wage laws. Employers often initiate audits simply to ensure that they’re paying all employees fairly.

Why was Equal Pay Day celebrated in the 1990s?

Now known as Equal Pay Day, this date — which changes each year — represents how far into a given year women, on average, must work to earn what the average man earned the prior year. The day is meant to raise general awareness of the gender pay gap.

When was the National Committee on Pay Equity founded?

The 1970s: In 1979 , the National Committee on Pay Equity was founded. This committee, which consisted of unions, professional organizations and prominent women’s groups, sought to further pay equity through education and lobbying.

How to achieve pay equity?

Achieving pay equity requires an intentional, ongoing commitment to equal opportunity and fair compensation. These best practices are a good starting point, but it’s important to fine-tune your pay equity strategy to play to the strengths and opportunities of your organization. For instance, a company that’s transitioning to permanent remote work may choose to make pay equity adjustments as people relocate. A company that struggles to hire people from underrepresented groups into leadership roles may introduce unconscious bias training. The path to pay equity won’t be the same for any two companies, but the journey will be well worth it.

Why do employers ask for salary expectations?

This can help ensure that neither party wastes their time if expectations don’t align with the budget —but it may also lead to unfair wage gaps. This is due to the expectation gap.

How much do women make for every dollar?

Women earn 82 cents for every dollar men earn. Black men earn 87 cents for every dollar White men earn. People with disabilities earn 66 cents for every dollar those with no disabilities earn. Knowing a candidate’s salary history can influence your compensation decisions and perpetuate these long-standing wage gaps.

Is pay equity top of mind?

Pay equity is top of mind for many company leaders and compensation professionals. While we’ve made some decent progress in narrowing wage gaps, we still have quite a bit of work ahead to fully close them.

Why is Pay Equity So Important to Employees?

From an employee’s point of view being treated fairly means that you have the same shot at success as the person next to you. It means that you don’t have disadvantages that you can’t control and can’t make up for in the eyes of your employer. It means that your managers are less likely to purposefully ( or unconsciously) limit the opportunities you receive or how you are recognized and rewarded, due to their own blind spots or even conscious prejudices.

How does an organization achieve equity?

To accomplish equity, an organization must accept the fact that their employees all experience different disadvantages and advantages based on aspects of their lives they do not control, and to which most people are virtually always unaware because this is simply “the way things are.” We all have these blind spots about the social and cultural norms within which we live and work. Pulitzer Prize-winning author Isabel Wilkerson likens these cultural blind spots to the social practices that generate a caste system in every human society, including in the United States and Western Europe.

How to achieve equity in an organization?

To accomplish equity, an organization must accept the fact that their employees all experience different disadvantages and advantages based on aspects of their lives they do not control, and to which most people are virtually always unaware because this is simply “the way things are.”.

Why do employers pay people's wages?

Because employers pay people’s wages, they are in an unusually powerful position to help right the wrongs of unjust cultural blindspots to the extent they treat people, and pay them, equitably.

What does the gap in pay between genders and races indicate?

Unfortunately, when salaries are compared across industries, there is very clear evidence that the gap in pay between genders and races indicates systemic oppression, baked into organizations’ compensation practices. So, clearly the answer should be straightforward.

Can pay equity be achieved without transparency?

And there is ample evidence that without transparency pay equity can’t be achieved when we look at the pay gap statistics, which haven’t moved significantly in years. The lack of change in the pay gap indicates that organizations are in fact highly unmotivated to enforce fair pay policies, even if they exist on paper.

Is it legal to share salary information?

Through this lens, it’s easy to see why organizations would find pay transparency problematic to their financial spreadsheets, and many of them informally encourage their employees not to share salary information for this reason. Because we’re discouraged from sharing our salary information, many actually believe sharing salary information is illegal. However, it’s very legal. Since 1935 the National Labor Relations Act has protected employee salary discussions to ensure competitive markets.

1. Rethink how and when you analyze pay equity

Completing a pay equity analysis is not a new practice — but the way it’s being done is changing, and fast.

2. Be prepared to fix (and prevent) the problems you find

It’s not enough to simply be aware of pay inequity — companies must be prepared to address and resolve the issues they uncover. What’s more: pay equity is not a one-and-done initiative because disparities can come up at any time as your workforce changes throughout the year.

3. Show your commitment to pay equity

Most companies have historically been afraid to talk about pay equity. They preferred to analyze and resolve issues under lock and key or, worse, do nothing at all.

Why is pay transparency important?

To mitigate like-for-like pay gaps, pay transparency is important for employees to understand where they stand and why they are paid a certain amount versus what others are paid. Also, holding managers accountable for merit pay and having formal remediation protocols for pay disparities can ensure that manager discretion doesn’t promote inequality.

What is pay gap analysis?

By-level pay gap analysis looks at average female and male pay at each level in the organizational hierarchy (analyst, manager, etc.) to identify pay gaps within each management tier, regardless of functional division. While it accounts for some of the leadership representation gap, it doesn’t account for the fact that there are a disproportionately high number of women in back-end or support positions, as opposed to profit and loss positions.

How to address gender pay gap?

To address the gender pay gap at the organizational level, companies need to institute policies and programs to recruit, retain, and promote women, including addressing unpaid care needs, and enabling managers to combat unconscious biases and contribute to equitable workplaces. Government and civil society should support women in entering and growing their careers, particularly in non-traditional, higher-paying fields and jobs. Removing social barriers for girls and women and supporting STEM education are also important to creating meaningful social change that will positively impact business and economic growth. Ultimately, equal pay—and gender equality more broadly—is an ongoing process that requires steadfast commitment, collaboration, and a willingness to step up.

What is organizational pay gap analysis?

Organizational pay gap analysis compares the average salary of men with that of women across an organization. This calculation results in the largest estimate of pay disparity, as many companies have a disproportionate number of men in higher-paying managerial and leadership roles.

What are some ways to reduce the gender pay gap?

Best practices for mitigating the gender pay gap at the organizational level will increasingly include offering paid, non-transferable paternity leave. It will also include training managers on unconscious bias related to maternity and paternity leave, including parents returning to work. Companies are also increasingly offering programs that provide support and guidance for parents returning to work. Accenture, for example, has a Maternity Returners Program that provides career guidance to newly returning mothers and helps them transition back into their roles.

How much will gender equality boost GDP in 2025?

Inequality in the workplace also results in trillions of missed GDP dollars: A 2015 McKinsey study estimates that by 2025, gender equality in the labor market could boost US GDP by 10 to 12 percent compared to the business as usual scenario, and it could boost global GDP by up to $28 trillion. At the current rate, women will not see equal pay in ...

What is like for like analysis?

Like-for-like analysis (equal pay for work of equal or comparable value) examines the difference in salary that men and women earn in similar occupations.