How to measure equal pay for equal work

Pay equity isn’t just a moment – it’s a movement. It is becoming more important for organizations to implement a pay equity strategy that they can measure. But how can they do this?

In a recent webinar, experts from inside and outside Salary.com discuss some of the ways that employers can measure pay equity within their organization. They also offer their insights and suggestions to help guide you and your organization through the challenges and processes related to pay equity. Without further ado, here is an introduction to the topic of measuring pay equity for equal work.

What is Pay Equity?

At Salary.com, we define pay equity as fair pay for comparable jobs that is internally equitable, externally competitive, and transparently communicated. Pay equity requires a comprehensive solution that reflects what’s happening inside and outside your organization – defining how organizations approach their relationship with their employees. Carol Ferrari, Vice President of Product Marketing at Salary.com, offers her view:

“Pay equity is not a one-and-done exercise, it’s not something you need to do just because you’re trying to comply with state and federal laws, although that’s important.”

Why Does it Matter?

Implementing and measuring pay equity within your organization matters. Employees are demanding pay equity and state legislation regarding it has become more common. There are now 42 state legislatures that have different kinds of pay equity laws, and many of these laws have safe harbor provisions for organizations that audit pay equity regularly.

Pay equity is also seen by many as the right thing to do. Having equal pay for the same job promotes fairness and allows for your organization to be consistent. Carol Ferrari shares her take:

“It improves productivity and morale. Who doesn’t want to work for a company that makes a really big goal of pay equity?”

So, why else does pay measuring pay equity matter? Well, every job and human is different. When comparing jobs, it depends on the actual work that has been completed, not just the name of the role. To effectively compare jobs, you need to come up with categories that make sense for your organization and the work. Heather Bussing, Employment Attorney & HR Analyst, explains why measuring pay equity accurately matters:

“It matters because it’s really hard to compare things that are not the same. And no job is the same, in fact, two people doing the same job is not going to be the same.”

How Can You Measure Comparable Jobs?

When measuring pay equity, you must group comparable jobs. To do this, you should:

1. Collect and validate data

   When collecting data, you must look at employee demographics and other related elements. Consider what the current compensation levels for each role are and what the job content is. Make sure to validate that all data is correct, otherwise, it will be useless.

2. Analyze and document jobs

   Document the content of all the jobs within your organization, including:

• Skills
• Duties and responsibilities
• Training and certification
• Technical skills
• Years of experience
• Education requirements
• Management competencies
• Physical requirements

Use standardized job descriptions that outline the essential responsibilities and specific qualifications to perform a job successfully. Having accurate job descriptions is foundational for identifying comparable jobs for internal equity purposes. When you do this, ensure that you keep them up to date.

3. Evaluate jobs

When evaluating jobs, you will want to determine the relative worth of jobs so you can create an internally aligned job hierarchy. Relative value is the similarities and differences between jobs that are identified in the job analysis process. How pay is determined depends on the differences in work, and comparable jobs should be paid similarly.

4. Build job structures

Post-job analysis, your results should be able to produce a job structure or a job worth hierarchy that translates your internal alignment strategy policy into practice. It will rank all your jobs based on how the skills, duties, responsibilities, and compensable factors contribute to your organization’s goals. When deciding on how many levels to define:

• Make sure you don’t get so specific that multiple levels end up with only one or two jobs
• Don’t be so general that when you look at pay ranges in that group, the range is so wide, it’s almost meaningless.

Watch the Webinar Today!

The goal of grouping comparable jobs is to compare work and pay for the next step, which is ‘Analyze for Internal Pay Equity.’ Ensure your analysis is valid as the steps above will be the foundation of your analysis. If you want to hear more from our experts on the topic, follow the link to the webinar here.