Go to main content HR Performance Solutions
Contact Us 800-940-7522
Pay Equity Roadblocks
Authored By: Megan Mohr on 9/9/2015

Does your organization have an unusually high turnover rate? Or maybe it’s getting one too many employee complaints when it comes to salaries and raises? You might be facing pay equity roadblocks.

As many compensation experts know, the risk of pay inequity has never been this high. Pay equity not only promotes good pay practices, it can help your organization address the Office of Federal Contract Compliance Programs’ (OFCCP) concern with systematic risk. The agency is on the lookout for instances of supposed broad discrimination by race, ethnicity and gender.

The OFCCP now mandates that companies submit an annual “Equal Pay Report” to show compensation data by race, ethnicity and gender. This quest for additional company reporting is not just happening locally but on a global level as well. Recent research from Mercer and the World Economic Forum uncovered that women are underutilized in the workplace. Labor force participation for women aged 25 to 54 in the United States was 74.5% in 2012, a full 14.2% lower than men in the same age group. Employer risk liability with equitable pay was also increased when President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 into law.

Does Your Company Have Pay Inequity?

If your organization is unsure if it’s facing pay inequity, look for these indicators:

  • Negative feedback from employees on salaries and promotions
  • Discrepancies among demographics like race or gender
  • Your company lacks a formal system for evaluating and setting salaries or forecasting promotional ranges

Moving Forward

The key to moving forward on pay equity is to remember that your approach to it is as important as the actual compensation plan it implements. Pay inequity can affect both your staff’s behavior and performance and your organization’s ability to attract and keep quality employees. These are two potential roadblocks in its road to success. Be sure your pay is equal, internally and externally, and those roadblocks will soon disappear.



« Return to "Compensation Administration "
Go to main navigation