How do you identify and address pay equity issues in your organization?

1 Conduct a pay audit

A pay audit is a systematic analysis of your organization's pay practices and policies, aimed at identifying any gaps or disparities among different groups of employees. Conducting a pay audit can help you measure the extent and causes of pay inequity, as well as the potential legal and financial risks. You can choose to do it internally or hire an external consultant or firm for assistance. The audit should cover criteria and methods used to determine pay levels, ranges, and adjustments; the distribution and composition of employees across pay grades, bands, and categories; the average and median pay for each job or role; the factors that influence pay decisions; and finally, the impact of pay inequity on employee turnover, retention, engagement, and satisfaction.

2 Review your pay structure

A pay structure is a framework that defines how your organization assigns pay to different jobs or roles, based on their relative value and contribution. Such a framework can help ensure consistency, transparency, and fairness in your pay practices and policies. To achieve this, the pay structure should take into account the market value of each job or role, as well as the internal equity of each job or role through an objective job evaluation process. Additionally, it should align with your organization's goals, strategy, culture, and values, while providing flexibility and adaptability to changing business needs and employee expectations.

4 Train your managers and employees

Training is a key component of ensuring pay equity in your organization. Through training, managers and employees can learn about the legal and ethical implications of pay equity, as well as the best practices and guidelines they need to follow. Additionally, they should be made aware of the common causes and consequences of pay inequity, as well as the tools and resources available to them. Finally, they should be taught the skills and behaviors required for pay equity.

5 Monitor and evaluate your pay outcomes

Monitoring and evaluating your pay outcomes is a continuous process of measuring and assessing the effectiveness and impact of your pay practices and policies on pay equity. This process can help identify and address any issues or gaps, as well as celebrate and reward achievements and successes. To do this, you should collect and analyze pay data and metrics on a regular basis, compare outcomes with internal and external standards, solicit feedback from managers and employees, report to stakeholders, and review/update your pay practices and policies as needed.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?