PayScale, a compensation and software firm, released a recent report titled, “Does Pay Transparency Close the Gender Wage Gap?” CEO Scott Torrey made the following statement based on the research findings related to their compensation study:
“This latest research shows just how powerful transparent pay practices can be for organizations. When employers use real market data and talk openly with employees about their pay, it serves to challenge the underlying bias that can impact decisions about compensation. Most employers want to ensure they’re paying fairly, so we encourage HR departments and senior leaders to adopt transparent pay practices as an important step toward achieving this goal.”
As compensation consultants with several decades of client experience, we affirm Mr. Torrey’s statement about pay transparency and its impact on paying employees fairly, but we also believe that internal job valuing and the use of external market pay data provides for a higher level of pay transparency and pay equity. Validating an internal job valuing process with external market pay data helps managers and employees to see more clearly how the base compensation process and structure and pay equity efforts are handled in their respective organizations and companies.