Human Capital Management

5 Ways to Increase Pay Equity (That aren’t compensation)

/ January 8, 2024 January 8, 2024

Most of the research and guidance that supports pay equity focuses on one thing, math. It is primarily focused on statistical analysis of dollars and cents in comparison to pre-defined categories of gender, age, race, and ethnicity.  Most pay equity analyses are looking for statistically significant differences in current pay, for current responsibilities at a singular point in time. The reality is that pay disparities are often a result of a variety of factors and to drive equity, organizations need to look at more than just the math.

Exude Human Capital has identified 5 areas that fundamentally affect the trajectory of salary growth for individuals within organizations.  When looking beyond the dollars, consider exploring these areas for an indication of organizational equity.

  1. Job Scope
  2. Support
  3. Development
  4. Advancement
  5. Transparency

1. Job Scope:

Pay equity is defined as equal pay for work; but “equal work” should require further analysis.  As an example, consider whether job responsibilities are distributed equally across the team.  It is common practice that employees who take on more work are rewarded more than those who don’t.  Leaders should consider whether those additional responsibilities are equitably available to all team members.

2. Support:

In pay-for-performance organizations, employees considered for additional rewards are typically those assessed as the most successful.  Yet highly successful employees are often leveraged for their success and may receive additional support to enhance outcomes.  Organizations should consider whether access to resources and support are available and deployed to all employees across the team, based on each individual’s unique needs.

3. Development:

The greatest opportunity for salary growth is through development.  This can include the development of skills, relationships, or experience.  While some development will happen organically, targeted or comprehensive growth is more effective at preparing an employee for the next role.  This type of development requires investment, and it is not uncommon for leaders to invest in team members who work and think similarly.  Development should be facilitated for all those who are interested and committed to growth.

4. Advancement:

Career progression and salary growth often require advocacy in addition to eligibility and qualifications.  While advancement opportunities are often considered widely available, not all employees may have the same level of advocacy to support their pursuit of a higher-level role.  Leaders should also be cautious when using prior titles as the sole indicator of a candidate’s eligibility to perform the key functions of a higher-level role.

5. Transparency:

While on paper, organizations can show a statistical analysis that does not contain significant anomalies, documented equity does not mean that there is perceived equity among employees.  The most impactful way to demonstrate equity is to provide transparency to how pay decisions are made. When employees have a clear understanding of what it takes to advance and can trust that career development and compensation decisions are made consistently, there is a greater perception of organizational equity.

At Exude Human Capital our team of experts are here to share best practices as we review strategies that support your unique organization. We know that the best human resources consulting solutions are custom-designed to meet each client’s needs. For more information on Exude Human Capital Consulting and to schedule a complementary 30-minute consultation with one of our experienced professionals CONTACT US.