More and more states are passing laws requiring pay equity between men and women. More and more states are passing laws protecting employees who share information about their pay and who file claim against their employer for inexplicable disparities. We’re also seeing more and more coverage about the #TimesUp Movement and the inroads they are making by demanding representation and equal pay in addition to addressing cultures of sexual harassment.
It’s time for employers to get serious about Pay Transparency and Equity.
Arguably, employers should have always been doing these things. Pay transparency and equity are good for recruiting, retention and engagement. Companies that are transparent and equitable have higher customer service satisfaction and revenue. And they have lower healthcare and absenteeism related costs because happy employees are healthy and show up consistently for work.
Unfortunately, antiquated protections surrounding skills and seniority made it easy to hide behind unfair practices. Or perhaps there just wasn’t enough information to pressure encourage and empower to employers to do the right thing.
Welp, #TimesUp on that non-sense.
So if you’re ready to get serious about Pay Transparency and Equity, here are 3 steps you can take in a better direction:
- Write and publish your compensation plans … Having documented pay plans that are readily viewable to employees at all levels of the organization is essential to creating transparency and equity in your organization. It removes all the mystery and secrecy surrounding who gets paid what, when and why. If your organization has a lot of pay plans, you have two approach options: a) start at the top because it’s a greater show of seriousness to reveal what the senior people are making or b) start with the most common positions because it’s the lowest hanging fruit. Wherever you start, let the people know your method and don’t stop until you finish all the plans — including bonuses, incentives, benefits and rewards.
- Audit your compensation for inequities … Look at every department. Every job title. Every role. Compare across gender. Compare across race and ethnicity. Compare across age. Compare across tenure. Compare across sexual identification and orientation, religion and veteran status, if that is information you’re privy to. Smack, flip and rub down the data from every angle you can think of! And when you find differences, discuss them critically and decide how you’re going to address inappropriate differences. Create a plan to close the gaps — including how you’re going to announce your plan to the individual employees and the organization at large to maintain the transparency practice established in step 1.
- Document necessary differences … Sometimes, differences in pay are warranted. Perhaps a person has more relevant experience or education that equates to more money in the position. Perhaps a person has greater tenure in the organization that the company wants to honor. Perhaps a person was or is grandfathered into a pay plan that was later discontinued … Other than these reasons, there aren’t many other appropriate reasons for pay inequity within an organization. Whatever the reason, tell it to the negatively impacted employee and document it in their file. I also recommend you practice reciting your explanation with a “Your Honor” at the end of it. If your reasoning doesn’t sound legitimate when you imagine saying it to a judge, you probably need to seriously revisit step 2 and make an equity adjustment.
As a Woman and Person of Color, I have been personally impacted by pay inequity most of my career. It hurts financially and emotionally to be devalued this way by companies who espouse lofty, inclusive values while ignoring inequity at the most basic of levels. As someone working in HR and dedicated to defending the company and keeping employees engaged, it leaves you feeling like a fraud and a sellout whose profession and inputs are totally disrespected. That dissonance chips away at your spirit as time rolls along and nothing changes for the better.
Times up on that non-sense, too.
Pay transparency and equity are not impossible when your organization is sincerely committed to integrity, fairness and total wellness. Take the steps needed to fix your failures. Your employees and your bottom line will thank you.
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