Eliminating the Gender Pay Gap

PAY DIFFERENTIATION

Before we look at how to screen your organization for discrimination, we must first examine pay differentiation.

Differentiation in pay is a business goal in organizations. All organizations pay differently for different jobs and consequently pay people different amounts of money. Even if an organization were to pay all employees the same, some employees would unquestionably claim that this kind of equality is discrimination.

The problem is not whether to discriminate in pay but rather how organizations go about discriminating.

Compensation is intended to create behaviors that lead to the accomplishment of organizational goals. When differentials in pay are based upon this principle, then the organization may be seen as discriminating in the best sense of the word.

Pay differentials should be based on:

• job content
• performance on the job
• qualifications such as education/training/experience that enable the person to do the job

In order to make certain that pay differentials are based on the above factors, you need to analyze the organization's pay decisions. In the next section, we will show you how to conduct an audit of your company's compensation system.