Pay Equity Analysis Resources
Free Resources for Employers to Address Pay Equity
A pay gap analysis and a pay equity study answer different questions. The first measures the unadjusted or adjusted difference in average pay between groups. The second tests whether people doing similar work are paid similarly once legitimate factors are accounted for.
Confusing the two is the most common reason a compensation review produces a number nobody can act on. These resources cover scoping a study, building comparison groups, running the analysis and deciding what to do with the result.
Addressing pay equity continues to be a challenge. DCI experts are watching the surge in pay equity laws and are on the cutting edge of compensation analytics. We are here to provide the most relevant resources possible to assist your organization in creating accurate and meaningful pay equity analyses.
What Employers Need to Know
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A pay gap figure is a descriptive statistic. It does not by itself establish that anyone has been paid unfairly, and it is not the number a regulator asks about.
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A pay equity study compares employees doing substantially similar work and controls for factors an employer can legitimately pay for, such as experience, tenure, location and performance.
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Building the comparison groups is where most of the judgment sits. Groups that are drawn too broadly hide real disparities, and groups drawn too narrowly leave too few people to analyze.
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Small groups that cannot support regression analysis still need a method, which is why one of the whitepapers here deals specifically with that case.
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Finding a disparity is the start of the work rather than the end. Remediation strategy carries its own legal considerations, and adjusting pay on the basis of a protected characteristic is a decision to take with counsel.
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Several states now require pay reporting on their own timetables, independent of any federal requirement, which the interactive map in this collection tracks.
Frequently Asked Questions
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What is a pay equity analysis?
A statistical comparison of pay among employees doing substantially similar work, controlling for the legitimate factors an employer uses to set pay. It asks whether people who should be paid alike actually are, once experience, tenure, location, performance and similar variables are accounted for.
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How is a pay gap analysis different?
A pay gap analysis compares average or median pay between groups without controlling for anything. It answers a question about workforce composition rather than about pay decisions. A large gap often reflects who holds which jobs rather than unequal pay within them, a distinction covered in more depth in pay equity versus pay gap.
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Which analysis do we need?
It depends on the question being asked. Boards, investors and public reporting frameworks usually want the gap figure. Legal risk, remediation and regulatory response usually need the equity study. Employers who need to act on the result generally need the equity study whether or not they also publish a gap. Comparing study approaches is a useful starting point.
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What do you do when the analysis finds a disparity?
Investigate before adjusting. A disparity can reflect a pay decision, a promotion pattern, a hiring pattern or a data problem, and the remedy differs in each case. Making a pay adjustment on the basis of a protected characteristic without first establishing why the disparity exists creates its own exposure.
What Is in the Toolkit
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Whitepaper: Conducting Pay Equity Analyses for SSEGs Too Small for Regression Analysis
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Whitepaper: The Science, Art and Whimsy of Making Salary Adjustments Following a Proactive Pay Equity Study
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Whitepaper: Employee Performance Ratings, Tainted or Sainted?
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Whitepaper: How Organizations Are Approaching Pay Equity Studies
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Infographic: Pay Gap vs. Pay Equity
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Infographic: 6 Steps to Improve Pay Equity
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Infographic: 5 Reasons to Conduct a Compensation Study
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Interactive Map: Pay Transparency and Pay Reporting Requirements in the US
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Webinar: Expert vs. Robot, What You Need to Know About Integrated Pay Equity Technology
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Ebook: Expert vs. Robot, Examining the Roles of Expertise and Software in Pay Equity Studies
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FAQ: Pay Equity