Lucas Noah If your organization hasn’t yet dealt with the pay parity issue, you will, one way or the other. Making sure that women in your company – and ultimately society at large — are compensated fairly is not only the proper thing to do, but it also protects you from lawsuits, heightens workplace productivity, and helps with recruitment and retention in a labor market that continues to evolve. Here’s what you should know about ensuring equal pay for equal work.
The Issue
After decades of struggle to correct it, the inequality issue lingers. Women continue to make 82 centers for every dollar their male counterparts do, and the effects are devastating and far reaching. There’s a similar problem when it comes to African Americans’ salaries. However, there are steps you can take regarding this persistent problem in the United States.
Before Your Next Big Hire
Before you set out to land your next top talent, clean up your house, pay-wise. The last thing you want is to bring someone aboard before you’ve vetted the work environment for gender or ethnic pay equity.
One of the first things you should do is make sure the pay range for the position for which you’re hiring is right on the job posting. And make certain that your compensation for that new hire aligns with what you’re paying your current people. By posting the salary, you’ll also weed out candidates who wish a different amount.
During interviews, do not inquire about previous pay. Whether or not you’re aware of it, making such inquiries perpetuates pay inequality. How? By basing your offer on what may have been an unfair salary from the jump. It’s a real and pervasive problem, so much so that some states have prohibited organizations from making such inquiries.
By setting forth a salary range for everyone to see, you and the potential hire can negotiate a compensation package that seems reasonable to all while still considering the prospect’s experience.
Determine to Be Fair
Your organization should conduct a pay equity analysis at least once annually. This is to check to see whether the local cost of living has changed, or there have been increases or decreases in competitive salary ranges.
Setting aside time to speak with employees about existing and aspirational pay will empower them during negotiations about pay and other employee rewards. Further, you’ll be prepared because you’ll know how much pay flexibility you have.
Keep Pay and Performance Reviews Separate
Doing so will help foster pay fairness by establishing a certain time for possible raises. In addition, you’ll enable all employees to address pay during compensation review time, affording them equal opportunity. What’s more, your people will be spurred to put their best efforts forward in expectation of a pay hike.
Go to Bat for Your People
Organizations that honestly aim to bolster pay equity should be willing to stand up for their people to achieve it. If you come to learn that an employee should be making more, have managers investigate what the person probably should be earning so that the issue can be properly dealt with during the next review discussion. Doing so will also give the employee the opportunity to find out more about how much they are valued based on their experience and conduct, while making sure they understand that it’s fine to discuss compensation.
Ultimately, ensuring equal pay is important for everyone, but it’s also smart business. It can shield you from litigation that can be costly to your organization, in terms of both money and reputation. Word does leak out, and in this tight labor market, you need every edge you can get, with regards to luring and keeping top talent. And let’s face it: happy employees are simply more productive. If you need help making sure your organization is doing right by its employees, both present and future, we suggest you enlist the help of Mercer, a leading HR consultant.