Stronger organizations. More vibrant communities.
Compensation practices that ensure fair pay for employees can lead to remarkable outcomes:
What is Pay Equity?
Here, pay equity is defined as the fairness of compensation paid by employers to employees – both individuals and groups of employees. We’re not reviewing merit-based systems in this series or focusing on disparities in pay for any particular group (women, people of color, younger workers). Our goal is to provide nuts and bolts guidance that helps you identify and address pay inequity at the organizational level.
The Society for Human Resource Management (SHRM) says, “Fairness in the workplace is a strategic priority for organizations.” We completely agree. For a comprehensive review of this set of issues and some legal background on pay equity, see their Managing Pay Equity Toolkit.
Pay equity has been achieved when an organization’s pay scale reflects consistent wages across positions, departments and classes, and when it is tied to a current, valid wage comparability study.
Key Steps for Organizations
Note: Changing a pay scale can have a significant impact on finances and operations, and may require months or years to fully implement, depending on the organization’s available resources and changes to be made.
Success is achieved when leadership commits enough resources (time, attention and money) to the process.
For complex projects, it helps to outline discrete, achievable steps:
Confession: There are 7 key steps above, but the entire process required for an organization to analyze pay and total compensation, discuss its evolution, and achieve pay equity is comprised of about 35-40 steps.
If you know this work, you’ll know that’s about right.
Thanks for reading! Please leave any feedback or comments below.
Learn More
Check back next week – we’ll talk about how to do a wage comparability study. Installment #2 will be released here.
We’ll also post via Twitter and LinkedIn. You can follow the company and Andi at the bottom of this page.
Additional Resources
Vu Le is a must-read. His blog, Nonprofit AF, is a gem (FKA Nonprofit with Balls). I heard him offer practical tips on this topic at the Oregon Nonprofit Leaders’ Conference last spring. Vu is a leader on the salary range issue and many others.
Here’s a decent article with an overview of pay equity on payscale.com
National Committee on Pay Equity – FAQ and Reports/Resources
Definition of pay equity from the Work and Family Researchers Network, who has an extensive archive.
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