Eliminating the Gender Pay Gap

SCREENING FOR IMPROPER DISCRIMINATION

This is the lesson of control systems: people pay attention to what is measured. For many reasons, most organizations need a compensation system to control their largest cost.

In order to monitor, evaluate and screen for pay discrimination, follow these steps.

Step 1: Review the compensation decision factors.

This may seem obvious, but you must understand why employees are rewarded as they are. Determining factors are based upon:

• time in grade or with the company
• pay grade, band, or pay level
• market value
• performance evaluation
• total education/training/experience
• years of related experience

It is important to assess the total years of related education and experience in the employees' career history, so the measurement is an apples-to-apples comparison.

Step 2: Prepare required core report.

Create a report of all employees including items such as:

• pay grade, band, or pay level
• job title
• performance
• gender
• employee type (regular/temporary)
• employee status (full-time/part-time)
• schedule hours per week
• base salary
• short-term incentives at target
• total compensation at target
• salary range midpoint
• market value
• department
• location
• department head
• hire date
• time in grade
• total years of related education/experience

Step 3: Assess secondary reports (pivot tables).

To look for signs of gender discrimination, we suggest you assess pay practices starting with regular, full-time employees to compare:

• salaries to find the average, median, highest paid and lowest paid female as compared to their male colleagues (the report could be assessed with the executive team and without the executive team to determine if this is the cause of the pay differentials)
• total years of related education/experience to determine if women are paid lower based on these factors compared to comparable male colleagues
• hire date to determine if hiring salaries are lower for female employees as compared to their male colleagues
• performance level to determine how females are paid based on performance level as compared to their male colleagues
• departments and jobs, to see if women and minorities are concentrated in particular areas as compared to their male colleagues