How Can Pay Equity Be Integrated into Compensation and Benefits Practices?

If chosen, pay equity can play an integral role in your organization’s compensation and benefits practices. If an employer wants to achieve pay equity, they must ensure that all employees’ total compensation package includes equal rewards, as well as equitable pay. This isn’t just a desire for employees nowadays though, as they see fair and equitable compensation as an expectation.

In this article, we’ll provide an overview of the ways that your organization can integrate pay equity within your compensation and benefits practices. It requires commitment, effort, and strategy, but is achievable. If done correctly, your organization can begin to attract and retain top talent at a higher rate.

Why Should You Integrate Pay Equity into Your Compensation and Benefits Practice?

Pay equity has been a topic of importance for decades in the US. As of now, pay equity is shaping up to be one of the defining compensation issues for the foreseeable future. The push to achieve pay equity is largely being driven by employees, job candidates, organization leadership, and society as a whole.

As a result, a recent Salary.com survey found that 95% of HR pros see pay equity as a competitive advantage in the war for talent. This competitive advantage stems from the benefits that achieving pay equity can have for your organization. These benefits include:

• Improved Employee Morale

Employees feel valued when you pay them fair and equitably for the work they perform. As well as this, it makes them feel safe in the knowledge that you are paying them based on their skills and qualifications, rather than discriminatory factors associated with personal attributes. A greater sense of fairness in your organization will ultimately lead to higher employee morale and productivity.

• Increased Retention Rate

Paying your employees fairly will reduce turnover in your organization. This is due to employees feeling confident and secure in the knowledge that they are being paid what they’re worth, rather than being undervalued. This higher retention rate will help your organization save money on recruitment costs that would otherwise be necessary if you needed to continuously find replacements.

• Boosted Employer Branding

Establishing pay equity in your organization is also a great way to boost your public image. Showing that you are committed to fair and equitable compensation practices will more likely convince job seekers that you care about your employees. As this is the case, there will be a greater chance of high-quality candidates applying to your organization.

Strategies for Implementing Pay Equity

To reap the benefits mentioned in the previous section, you need to choose strategies for implementing pay equity in your organization. Fortunately, there are several strategies for you to choose from to ensure that all your employees are paid fairly and equitably. Here are some tips that you can use to ensure you implement pay equity effectively in your organization.

• Establish and Maintain Consistent Pay Policies

This means ensuring that all workers who work in the same job category receive comparable salary increases, bonuses, as well as other forms of monetary compensation.

• Regularly Review Wages

Reviews should be conducted by looking at the different genders, ethnicities, and other characteristics that exist in your organization. If discrepancies are found, your organization must take action to adjust wages accordingly.

• Provide Opportunities for Employee Communication with Employers

These communication sessions should allow employees to ask questions and voice their concerns about wages. This can help you identify any potential issues that relate to pay equity before they become more serious problems.

• Promote Diversity and Inclusion Within Your Workplace

Actively engage and recruit job candidates from different backgrounds to ensure that you are being inclusive in your organization. As well as this, make sure that there are equal promotional opportunities for all qualified candidates in your organization.

Understanding the importance of pay equity and implementing strategies such as the ones outlined can help your organization make strides in the right direction. Compensation practices need to reflect your organization’s commitment to fairness and respect for all employees within your organization. Failing to do this may be problematic for your organization and leave your employees unsatisfied.

Avoid Discrimination When Implementing Pay Equity Practices

When implementing pay equity into your compensation and recruitment practices, you must be aware of what is discriminatory and what isn’t. Discrimination often occurs when organizations don’t consider protected characteristics such as age, race, ethnicity, disability, and more. To prevent this from occurring in your organization, you will want to make sure that your compensation practices are based on job performance, rather than personal attributes.

As well as this, you can put processes in place that don’t involve subjective measures that can be affected by discrimination. Doing this helps your organization be pre-determined and objective in how pay is dictated. Here are a couple of areas that you can consider when implementing pay equity into your recruitment and hiring practices.

• Job Analysis

A job analysis can help your organization ensure fairness for all employees. This process involves assessing the work a person does in a role, so that the job can be classified in accordance with other jobs within your organization. When conducting a job analysis, you should also make a note of any jobs that involve hazardous or strenuous activities that may require higher wages or premiums due to the risk involved.

• Comparable Worth Scales

A comparable worth system compares job categories and ranks them using qualities such as effort, skill level, responsibility, and working conditions. When building your comparable worth scales, you must be impartial. To do this effectively, allow employee representatives and HR personnel to be a part of the process, as this will help add objectivity to the final product.

Ensure that Your Pay Equity Practices Adhere to the Law

When discussing the implications of implementing pay equity into your recruitment and hiring practices, make sure that you comply with federal and state laws. Failing to do so can land your organization in hot water, which may reduce the capabilities of your organization actually implementing pay equity into your recruitment and hiring practices. If you are unsure of where your organization stands in relation to the laws that exist, consider consulting an employment lawyer to help you get started today.