19 Apr How to Address the Gender Pay Gap with Effective Enterprise Compensation Management
Determining whether there is a gender pay gap and taking appropriate measures to address it has become an increasingly important priority for companies across the U.S. There are many reasons why a pay gap may occur, ranging from lack of visibility into pay practices and siloed pay data to the absence of a compensation philosophy which can be enforced consistently throughout the organization. Luckily, a robust enterprise compensation management system can help you solve some of the most challenging issues surrounding the pay gap. See how below.
Challenge 1: You don’t know whether a pay gap actually exists in your company.
The gap between what men and women are paid can be based on weekly or hourly earnings. In general, the earnings ratio is commonly cited as 80% – in other words, women are said to make 80% of what men earn. Yet, this disproportionality does not account for the different types of jobs men and women hold, and is therefore of little use without the proper context.
To determine the adjusted gender pay gap in your organization, you must be able to account for specific job levels and years of experience. And, in order to have that, you need a compensation management solution that enables accurate and consistent job classifications.
Challenge 2: You don’t have a clear compensation philosophy for enforcing consistent pay practices.
To ensure employees are paid fairly based on the work they produce, skill and experience level, and any other unbiased criteria you use to make pay decisions, your company should have a clear compensation philosophy. This written statement should align with your overarching company objectives and define how you’ll maintain fair and equitable pay practices. Then, train your managers on the philosophy so that they know how to apply it consistently when making pay decisions. A compensation management solution can also suggest pay increases based on objective criteria to further support fair pay practices.
Challenge 3: Employees don’t understand how pay decisions are made.
A final challenge in many organizations is that employees lack line of sight into how pay decisions are made, which can result in mistrust, rumors, and false assumptions. To that end, you must ensure your managers are having candid pay discussions with their employees in which they reinforce the organization’s compensation philosophy, employee expectations, progress on goals, and how awards can be achieved. Moreover, a compensation solution can provide employees with a comprehensive overview of how they’re compensated, going beyond base pay to include benefits, so they see the full picture of the employee value proposition.
HRsoft is the trusted global leader in compensation management software whose COMPview solution is proven to control and simplify the full process and allocation of merit, bonus and equity awards to drive manager and employee engagement.