Is Comparable Worth/Pay Equity Gaining in Momentum?

Comparable Worth/Pay Equity is the concept of ensuring all employees regardless of their gender, ethnic background, military, disability, etc. receive equal pay when using comparable skills and responsibilities to complete the work.  Comparable worth provisions promote equal pay for comparable work.

With all of the new laws and executive orders over the past eight years, the Wage Gap between women’s to men’s earnings has continued to close and will move closer and closer as more companies get serious about comparable worth policies.  These policies include the evaluation of each position in the organization against a common set of objective and defensible job valuing factors.  This kind of review takes out gender and other forms of potential biases to arrive at an overall point total score for the positions and not the individual in the position.

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Comparable worth vs. establishing market pay levels through outside market data only is definitely the way to go as it will allow you to use job attributes including skills, knowledge, accountability and working conditions to determine the number of job rating points to be assigned to each of the job attributes and arrive at a total number of points for each position.  Given proper oversight and accountability, you can avoid subjectivity by using a point factor system and be on the road toward true comparable worth/pay equity.Get Your Pay Right

There are automated software tools that create job descriptions as well as score the jobs against the compensatory factors and these, along with increased laws and regulations around comparable worth, are increasing the momentum for this objective approach to paying all employees for what they are worth, both internally and externally.

 

 

When Developing Employee Pay Plans, Read the Fine Print

Recently, a large and well-known employee salary aggregator was promoting its market-based pay comparison database and software system as a means for developing reliable pay rates. In the presentation about “developing market-based pay programs,” the company indicated that “internal job alignment” must be combined with market-based pay comparisons in order to create reliable pay rates.

Using market-based pay comparisons for determining pay schedules is the easiest and most popular process based on articles and studies released by WorldatWork. The large salary aggregators provide a very valuable service for compensation professionals by aggregating and validating the pay comparison data and providing it to the professionals for a fee.

Since 1985, the Johanson Group has been providing guidance, writing articles and speaking about pay structure validity and reliability by using a combination of internal job valuing and external market-based pay comparisons. So we know what works and what doesn’t.

With our decades of real-world experience, we have completed enough salary surveys to see the variation in pay from one year to the next. Or even one pay comparison source to the next, for that matter. By relying solely on external market pay comparisons, your organization’s pay structure is at risk. Think about using only a compass to obtain a general idea about where you are going (market-based pay only) compared to using a modern GPS to obtain a very accurate indication of exactly where you are at all times (market-based pay plus job valuing).

New Call-to-actionThe problem with the old job valuing systems was that they were too time-consuming and too subjective. Thankfully, these problems have been left in the past with the introduction of the DBCompensation system. DBCompensation greatly streamlines processes, resulting in tremendous speed and productivity gains. As an example, in the past week Johanson Group completed 330 job descriptions for two clients, including full job valuing in only 55 total hours of work, or an average of only 10 minutes per position title.

For even more time savings, DBCompensation allows importing employee data from HRIS and payroll systems. DBCompensation even allows you to use to twelve separate sources of external market-based pay comparisons, allowing you to create a comprehensive, defensible classification and compensation program quickly and easily.

This industry-proven process provides the basis for developing and maintaining a reliable pay structure, which allows your organization to make more accurate and informed compensation decisions so that you don’t unknowingly overpay or underpay your employees.

Remember, when developing employee pay structures with market-based pay comparisons, read the fine print. Market-based pay comparisons and internal job valuing are required to create valid pay rates.

Get Your Pay Right and Use an HR Software System That Pays For Itself

During a recent discussion with a prospective customer, the Human Resources Director stated that her company has doubled the number of employees during the past three years. The company was growing so quickly that the CEO asked the Human Resources Director to find a system that would better manage their compensation process.New Call-to-actionThe Human Resources Director attended a DBCompensation software demonstration and she really liked the features and ease of use, but stated that she did not know if the company was ready to make an immediate decision.

Since the DBCompensation software costs as little as $400 per month for a small company, and the prospective company’s monthly investment would be $800 per month based on the company’s size, I posed two questions that she could share with her CEO.

“What if you overpay only one of your hundreds of employees by $1,000 per month?”

“What if you only rely on market pay comparisons to establish your pay rates and you underpay one employee by $1,000 per month, and that employee ends up leaving your company to join another company that pays a more competitive wage?”

She pondered the questions for a moment. I then followed-up with two important thoughts about investing in DBCompensation.

“By not overpaying just that one employee, DBCompensation more than pays for itself.”

“If just one important employee leaves because of pay, the time and expense required to attract, hire and train a new employee is much higher than the modest expense of DBCompensation.”

Getting your pay right is a critical Human Resources responsibility with far-reaching implications for every organization. After thinking about the immediate return on investment, the Human Resources Director stated that she was ready to visit with her CEO and make a case for adopting the DBCompensation software system in a timely manner.

Pay Transparency, Closing the Pay Gap and Multiple Regression Analysis

Learn more about Pay Transparency and closing the pay gap with Lilly Ledbetter’s story.

Is Your Job Description Software Unaffordable?

A majority of the job descriptions used in organizations and businesses across America are developed and maintained in a Word.doc file format. This means that the job descriptions are typed and usually follow a predetermined paragraph heading format.  Without an automated job description questionnaire template, this process can become lengthy and it fosters inconsistency based on the creative nature of each person tasked with typing the job description content.  

Is Your HR Compensation Software Unaffordable?

Is Your Organization Struggling With Job Valuing?

Is Your Compensation Program Complicated and Time-Consuming?

Navigating Compensation: Accurately Map Your Latitude and Longitude

Compensation can be a complex and challenging course to navigate. You, the HR professional, are required to accurately map out your compensation program in order to effectively retain and recruit high performing human capital for your organization.

In the past, explorers used compasses to obtain general directions. Christopher Columbus thought he had landed in the East Indies, when in fact he had arrived in the Americas. During his lifetime, he never admitted to reaching a continent previously unknown to Europeans. Even Daniel Boone, the famous American pioneer and explorer, upon being asked if he had ever gotten lost replied, “I can’t say as ever I was lost, but I was bewildered once for three days.”

Market Data Only – Really? Utilize Job Valuing.

In an era when it is necessary for organizations to create compliant, competitive and equitable compensation programs, taking a shortcut and pulling “only” market numbers doesn’t cut it. Using a multi-factor approach is imperative when establishing your organization’s compensation structure, which provides your organization with the level of sophistication, defensibility and compliance that is needed in today’s world.