July 10, 2024
Pay Equity: Conducting a Thorough Audit (Part 1)
This Zayla Partners article on conducting a thorough pay equity audit gets into the nitty gritty of the analytical techniques for pay equity audits. For folks who understand what a pay equity audit is and why it is important, but haven’t worked through one and don’t have an understanding of how the analysis works, the article gives this explanation:
Pay audits use a range of analytical techniques and tools to uncover potential compensation inequities. Regression analysis identifies predictors of pay and figures their impact (while considering legitimate factors). This helps to isolate potential discriminatory variables.
Visual data analysis through scatter plots, quartered distributions, and other visualizations makes it easy to spot outliers and anomalies that need further investigation. Dashboard reporting on HR analytics platforms shows audit findings across multiple pay dimensions and breaks everything down into problematic segments.
Survey data adds qualitative context around employee perceptions of compensation fairness, transparency, trust, and engagement. Discussions with employees and managers through interviews provide firsthand experiences and insights into potential equity barriers. Reviewing job titling conventions, descriptions, and framework levels helps find discriminatory practices.
Comparing internal pay against market salary ranges helps to locate outlier positions. The best approach combines quantitative statistical tools with qualitative techniques to understand what’s behind inequities. A multi-modal analysis provides a complete view into compensation equity.
Tomorrow, I’ll be sharing the article’s coverage of key steps in any thorough pay equity audit — including the important work that follows the compensation analysis.
– Meredith Ervine