EMPLOYMENT DISCRIMINATION
Compensation & Pay Equity Studies
An internal pay equity study can be a valuable tool for an organization to gain a better understanding of factors affecting compensation in the organization's workforce. The purpose of a pay equity study is to determine whether or not members of protected groups are paid equally within the organization's workforce. For example, pay differences between men and women, or by race would be identified, and reasons for these differences explored.
Although a basic pay equity study could be done which simply analyzes compensation by job title and protected status, compensation issues may be much more complicated than simply comparing average pay.
Employees may be salaried or hourly, and may receive many types of pay, such as salary, overtime, commission, and bonuses. New employees may start at different rates based on factors such as length of experience, salary at a previous employer, education and other qualifications, competitiveness of the local job market at the time of hire, or regional differences. Some employees may be covered by a union contract. Others, such as salespeople, may be paid subject to a complex compensation plan including commission and other factors.
A pay equity study may begin with a detailed evaluation of the jobs within the organization Job requirements and qualifications may be analyzed for each of the job groups being studied. In this data-gathering phase, Employment Research Corporation may review documents and interview human resource officials to gain a thorough understanding of the factors affecting compensation.
A pay equity study will include evaluation of compensation data, such as payroll records, and performing a statistical analysis of differences. Where differences are found, a more detailed investigation of the specific circumstances may be conducted. This investigation will take into consideration knowledge of the organization's compensation policies.
A comprehensive report will be prepared explaining the results of the pay equity study, and may be presented to the organization in a work session. Recommendations for changes will be discussed, and statistical implications of various scenarios may be explored.
