The first step is to ignore the Internet. It’s littered with misleading statistics and cross-profession comparisons. Knowing that schoolteachers in South Carolina make less than engineers in New York City is certainly a data point, but one that is as irrelevant as it is obvious. Instead of focusing on erroneous, shock factor statistics like “women get paid 70 cents on the dollar” take time to examine the actual situation at your organization by conducting an objective review of your compensation practices role by role, level by level.
Assuming your company has a career ladder with associated job grades and defined compensation ranges, the required analysis is straight forward. For example, let’s say you employ proposal developers and that job has three levels, each with additional responsibilities and requirements noted in the corresponding job descriptions. Aligning people into the correct level, whether new hires or recently promoted incumbents, becomes a fact-based decision. If you also have a defined pay range for each level, you can ensure all employees are paid fairly for the role.
Of course, there is always a quasi-subjective element to the process i.e. where on a specific pay range an individual will fall. But even this component has measures such as performance, experience, and customer/company knowledge that provides justification for slight differences in base pay. In the end, a screened review of all incumbents will ensure you are in alignment with your pay philosophy. If outliers exist, the analysis will surface those anomalies and force a discussion and justification. This allows you to account for other external forces such as market changes, employment levels and competition for niche skills.
You can also use a similar review process to ensure the fairness of promotions and performance rating allocations. Given the average organization’s ability to access data, this should no longer be an issue.
Leaders need to understand that having a pay gap puts you at a competitive disadvantage. Paying fairly for performance is not only the right thing to do, it’s the smart thing to do. Last thing: if there is an actual problem in your organization, don’t point a finger at some mythical man or talk conspiracy theories in the break room. Walk into you HR manager’s office and request answers. They own the process and with enough knowledge and courage can fix the issue…if it exists.
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Check out my latest book The HR Guide to Getting and Crushing Your Dream Job and follow me on Twitter at @timtoterhi or LinkedIn