In a time of historic income inequality, how can organizations pay employees more equitably?
One option combines data-driven practices with a dedicated, inclusive effort to study salaries, making adjustments where disparities are found.
Please see Installments 1, 2, and 3 for background on the series, where I cover the nuts and bolts of this work (creating pay scales, conducting wage comparability studies). There are lots of additional resources, too!
New Tools to Interpret Data Gathered
Combining an internal pay scale with external wage comparability data will allow organizations to create a pay analysis worksheet. You can use Excel or another spreadsheet software.
Create a pay analysis worksheet:
Goals for Data Analysis
Analyze – Pay Scale
Discover – Pay Analysis Worksheet
Note: Technically a state is a region, so statewide salary data should be used. However, most states are so diverse that “urban” and “rural” are better terms for comparison when seeking similar geographic areas. You might also use a similar-sized city in a different state (same region) as one data point.
Pay Equity Analysis – Employee Level
You may want a version of the pay analysis worksheet for all employees (vs. positions only). A deeper dive will reveal:
On this last point, regardless of the intent (discrimination, implicit bias or institutional bias) that led to or contributed to any disparities in pay uncovered – the current pay inequity should be thoughtfully addressed.
Reviewing employees’ pay beyond position and classification is important work, yet it’s best undertaken after an organization has corrected any administrative deficiencies (such as the lack of a pay scale, or the first time setting equitable pay rates against external benchmarks).
Why? 1) Making consistent strides toward better compensation practices for all employees will benefit everyone. 2) It can be overwhelming to take on every lens or aspect of equitable pay at one time. If that work is not managed with transparency and appropriate speed, it can cause morale issues.
Next week we’ll talk about how to productively discuss all this data and make decisions based on it.
If you would like assistance completing a pay scale or wage comparability study, please contact us.
Thanks for reading! Feedback is welcome.