Pay equity analysis is one vital way of embedding equity with data. Not only is it the law in an increasing number of places, but it’s the right thing to do! There are numerous ways to conduct a pay equity analysis, some much better than others. In this series, we’re walking you through the intersectional gender and racial pay equity audit we recommend. In part 1, we talked about what materials you’ll need to get ready. Now we’re going to talk about what to do with that data once you have it.

 

Pay Equity Audits check to see if the way you are paying your employees is congruent with your ‘compensation philosophy’. Your compensation philosophy is a fancy term for how your company values employees. It includes how much you are willing to pay someone based on their job responsibilities, experience, job type, performance, etc. It’s unique to any given company and it likely changes and evolves frequently. What a pay equity audit does is look for places where factors outside your compensation philosophy have affected an employee’s pay; this is a red flag because it might be something that shouldn’t affect pay like race, gender, etc. 

The first thing you need to do with your newly gathered data is to ensure that the data contains the indicators of which people are doing similar jobs. A gender and racial pay equity audit sets your organization up so that people doing similar jobs are paid similarly. This means going through the data and ensuring that each person is assigned a job title, a job grade, and a job classification that indicates which category their work falls into based on the job’s required skills, responsibilities, and effort. This basically puts each employee somewhere on your company’s compensation philosophy line.

Sometimes these categories are already in place for a company but many times they are not. Your pay equity analysts should walk you through a carefully designed three-step process to assign these ‘job descriptor indicators’ to each person. We All Count does this using your Human Resources database or in collaboration with your leadership team and/or your Diversity Equity & Inclusion (DEI) team. This is usually the only part of a pay equity analysis that requires an investment of meeting time on your part. This investment sets you up for a foundation of long term transparency, trust and a great company culture.