Framework replaces outdated market-based pay philosophy with a pay equity philosophy designed to win the war for talent
Recent pay equity research from compensation management firm Salary.com® reveals corporate actions are falling short of employee expectations. Among the findings: almost half of employees surveyed do not think they are paid fairly compared to people in the same role at other companies, and over a third do not think they are paid fairly compared to their internal colleagues. Compounding the issue, only one-third of companies say any manager at their company can honestly and accurately answer when an employee asks, “How is my pay determined?” To close this divide between employee expectations and corporate reality, Salary.com has introduced the Plunkett Pay Equity Framework™, which prescribes a six-step methodology, backed by data analytics, for attaining and sustaining pay equity.
“Pressure to address pay equity is coming from all sides – organizations must act now,” said Salary.com co-founder and CEO Kent Plunkett. “Pay equity requires a comprehensive solution that reflects what is happening inside and outside of a company and encourages transparent discussion on why people are paid what they are paid. Our pay equity framework stands apart because it guides companies on how to secure a leadership mandate to support a pay equity philosophy that drives employee engagement and wins the war for talent.”
This holistic view of pay equity guides a shift from pure market pricing to a broader pay equity approach to compensation. It also emphasizes how to achieve the transparent communication needed to integrate pay equity into the corporate culture.
Plunkett Pay Equity Framework
The framework prescribes a continuous pay equity analysis (CPE) method for compensation management, with a six-step benchmarking and employee communication process.
The key steps of the Plunkett Pay Equity Framework are:
- Mandate pay equity
- Group comparable jobs
- Model internal equity
- Benchmark external competitiveness
- Communicate transparently
- Update continuously
“As inflation rages and companies struggle to hire, pay equity has become a business-critical issue,” said Josh Bersin, Global Industry Analyst and CEO of The Josh Bersin Company. “I’m excited to see companies like Salary.com formalize this process so HR and business leaders can validate and benchmark their pay continuously and make sure all employees feel they are fairly paid.”
The Plunkett Pay Equity Framework’s design offers detailed actions and best practices for each of the six steps, effectively guiding companies through a streamlined approach to attaining and maintaining pay equity. Companies can leverage Salary.com software, the expertise of consultants, including the highly experienced team at Salary.com, alongside legal counsel and in-house HR and compensation experts, to conduct the pay equity process.
“Companies that reject the outdated market-based pay philosophy they have today to adopt a pay equity approach to managing compensation will be the most progressive employers in the country,” said Plunkett. “Their leadership will define how companies put employees first, making them employers of choice for talent looking for a new home.”
For more information on the Plunkett Pay Equity Framework, click here to download the white paper.
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