Pay equity, pay transparency, and brand management are all major talking points in the corporate world today. These are all essential topics to address, and even have a lot of overlap with each other. Here’s how organizations should think about pay equity, pay transparency, and brand management.
What Is Pay Equity and Why Does It Matter?
Pay equity is a huge topic in today’s world. There is ample evidence to show there are still substantial disparities between how people are paid based on discriminatory factors such as sex and race. While the difference between how women and men are compensated for equivalent work has closed in recent years, women still only earn a little over 80 cents for every dollar made by their male coworkers.
The idea of pay equity is simply that all people should receive the same amount of money for doing the same work. Of course, there can be some other differences that don’t qualify as discrimination, such as level of experience or education, which can lead to people receiving varying degrees of compensation.
At its most basic level, it’s obvious why pay equity is important: There should be no discrimination in the workplace, ever. But there are some additional reasons why pay equity and the gender pay gap should be a focus for every organization:
- You might violate laws – There are several federal laws that deal with pay equity—such as the Equal Pay Act of 1963 and the Civil Rights Act of 1964. A growing number of states are also passing their own laws regarding pay equity. This is important because enterprises that fail to meet the standards laid out by federal and state laws might find themselves on the receiving end of a lawsuit. Corporations have been required to pay out millions for gender pay gap violations in the recent past. Being unaware of your organization’s pay equity status can be a major risk.
- You can alienate employees – A company’s culture is one of the most important elements to its long-term success. If certain people feel they’re being mistreated, it’s going to create negative waves throughout the organization. Though some executives might think simply ignoring problems will make them go away, this is increasingly becoming a thing of the past. With the advent of social media as a tool for accountability, disgruntled employees can let the rest of the world know their disputes with the click of a button.
- You can alienate consumers – Especially for companies that sell consumer-facing products or services, keeping a positive public image is a necessity. Organizations that mistreat their employees through pay disparities are more likely to gain negative attention from those who might buy their goods.
As you can see, there are many reasons why enterprises must consider pay equity. Solving these issues, however, isn’t as easy as simply flipping a switch. Several aspects will need to be considered and addressed simultaneously to be truly successful.
How Are Pay Transparency and Brand Management Related to Pay Equity?
Whether you’re working to close a gender pay gap or any other type of pay equity issue, problems will only be solved when you take a holistic approach. What does this mean, though? Essentially, issues with pay equity are complex. While there are certainly some actions every organization should take in order to close pay gaps (more on this later), it’s important to understand that this likely isn’t going to be a straightforward process.
For starters, business leaders should identify some of the other areas that play a role in pay equity—even if not directly in the actual act of fair pay. Pay transparency and brand management both fall under this umbrella.
When it comes to pay transparency, this is an issue that need to be entirely reimagined at many enterprises. Not only has there traditionally been an attitude that employees shouldn’t talk about their pay, but organizations also often don’t facilitate a transparent process for showing how and why certain pay levels are determined for each individual. In reality, this is something that should begin at the time of the interviewing process, and continue throughout the employee’s entire tenure with a company. Simply opening up the decision-making process for pay calculation and distribution can help alleviate some of the issues related to pay equity.
Brand management is another area where enterprises might be surprised to find pay equity plays an important role. In today’s world, your brand image is expressed in every action, both internally and externally directed. No one feels good about a brand that doesn’t treat its employees well. Beyond just being the right thing to do, pay equity will keep your brand from gaining a negative reputation.
What Can Enterprises Do to Improve Their Pay Equity Stance and Strategy?
Now that it’s clear how pay equity affects an enterprise from top to bottom, you need to figure out the best way to deploy equitable pay practices. There are a few approaches that can help in this process.
Performing a pay equity audit is one of the crucial best practices that needs to be done at every organization. Running a pay equity audit is one of the ways to discover any potential gaps in compensation—and furthermore, why they exist.
Performing a pay equity audit, however, can be an extremely daunting task when undertaken with only internal resources. Working with a consulting firm that specializes in pay equity resolution can make a huge difference in moving toward your goals. With the right partner, you’ll get the benefits of experience and technology behind you. Additionally, the ability to run deep analysis will uncover data that would have been missed by an internal investigation.
A good pay equity partner will also be able to offer more general tools, such as a pay equity calculator. This can give a more immediate view over pay equity issues, while still providing potential solutions for remediation. Ultimately, the ability to give actionable recommendations is the mark of a great pay equity consulting partner.
Pay equity is at the forefront of corporate discussions today for a reason. People will continue demanding and expecting change until all pay gaps have been closed.