How to get rid of bias in your pay process - Part 1

Today let's talk about an important topic - creating fair and equitable approach to pay.

In this week's newsletter, we will look at the first part of the process. Establishing fair pay range through a job evaluation process.

As an HR leader, you know attracting and retaining top talent requires compensation that rewards performance and ability, not bias. That's where job evaluation comes in.

What Is Job Evaluation??

Job evaluation is a systematic process used to determine the skills and complexity of different roles within an organisation. This enables us to create a fair and consistent pay structure, ensuring that employees are rewarded based on their contribution and abilities, rather than personal bias.?

Advantages of Job Evaluation?

1. Common Language for HR Professionals?

Implementing a fair and consistent process creates a common language for HR professionals to describe career pathways, job requirements, and performance expectations. This standardised approach simplifies analysis and decision-making, allowing us to compare the value of work consistently and comprehensively. It also facilitates effective communication and understanding across the organisation.?

2. Fair and Consistent Pay Practices??

By evaluating and grading each role based on objective criteria, we can eliminate bias and discrimination in our pay decisions. The process will provide managers with a clear and organised method of evaluation that can be used company-wide.??

3. Informed Decision-Making?

Job evaluation also?helps to make informed decisions about the level of skill and complexity required. We can use this to define the levels of career framework. ?

By defining levels and criteria for each job grade, we can assess the skills and competencies required for career progression. This information can be used to develop training programs and learning opportunities that align with the knowledge and skills needed for advancement.?

4. Market Benchmarking?

With a career framework in place, created using a job evaluation process, we can effectively benchmark our salaries against the external market. This enables us to offer competitive pay for roles that require similar skills and responsibilities. By staying up-to-date with market trends, we can attract and retain top talent, positioning ourselves competitively.?

5. Equal Pay Compliance?

Equal pay for equal work is not just a moral obligation; it is also a legal requirement. Job evaluation provides us with the ability to conduct meaningful equal pay audits, ensuring that everyone is paid equally for the same job, regardless of age, gender, race, or other protected characteristics.?

Develop Pay Ranges?

At 3R Strategy we follow a comprehensive process (covered in my newsletter last month) to develop a bespoke job evaluation process. Once you have a robust process to consistently map jobs onto your career level, the next step is to build pay ranges for each job level or grade.

You may choose to have a single pay range by job level or this may vary by job function. For example, if the data is telling you that salaries for finance are much higher than customer support then by having a single pay range may either:

1. Make it difficult for you to attract and retain finance roles using a single pay range or
2. You may be paying significantly higher salaries to your customer support roles because they are in the same pay range as finance roles and slightly lower salaries to your finance roles (because the pay range is an average of finance and customer support pay)

You will need to balance the need for flexibility in managing pay versus a complex pay structure with many pay ranges for each business area. You can also choose to group many of your function together so that you only have 2-3 pay ranges. For example, if there isn't a big difference in pay between finance and HR you may choose to keep them together.

Conclusion

There are many different ways to manage pay structure for your organisation and build these around your job evaluation process. Whatever you decide, this sets the foundation for us to start getting rid of or minimising bias from our pay process.

You evaluate a role and the outcome now determines the pay range. This is the first step of the process

Step 1 - Establish what you're willing to pay for a job

It's important to remember that this is ONLY about the job (not the individual). If you were looking to recruit someone new into your role what pay range would you be willing to offer for the role.

In next week's newsletter, we will look at step 2 of this process - the individual.