In January, it will be ten years since the Lilly Ledbetter Fair Pay Act went into effect. The act resets the 180-day statue of limitations for filing an equal-pay lawsuit with each new paycheck affected by that discriminatory action. Yet, women still earn 82.5 percent % of their male counterparts.
It's mind boggling that so many individuals view equal pay as a hard problem to solve. Yes, it will take time, intentional effort, and iteration. But, the solution exists. And, it's possible for even the biggest companies to adopt.
A big part of why the gender wage gap endures is that we keep expecting women to figure out for themselves if they are paid equally, and to advocate, individually and for themselves, within an opaque system not designed for them. Don't make women do all the hard work; the burden for fairness and equality falls on everyone within your company, at every level. Here's how to make equal pay a reality in your organization.
Clear Expectations For Every Role
Step one in equal pay is creating a career ladder. The career ladder should include skills expected for each role, and at each level, as well as clear expectations around what's required to get to the next level. For example, a technology ladder will have junior developer, midlevel, senior, lead, manager, director, VP, and CTO.
Note: If your department is small, let's say one or two people, you want to define the expectations of the individuals currently on the team, as well as one level above them.
Transparent Salary Bands
Once you have your career ladder in place, pair each rung on the ladder with a salary band and make the information available to everyone. Salary bands should be small, with about $10,000 to $20,000 delta between the low end of the band and the upper end.
Promotions All Year Round
The most effective way to ensure each employee is paid what they deserve is to enable a system where employees get promoted to the next rung on the ladder when they are ready. Annual performance reviews tied to possible promotion and raises is harmful to equal pay. I recognize that big companies with red tape can't simply abandon the performance review process inside their organizations. The closer you can get to truly enabling employees to get promotions when they are ready, the better.
Bump Up Pay
And finally, offer off-cycle bump up pay. Let's say you have a senior level employee that's been at your company for four years. And over the past year, all of the new senior level employees you've hired have gotten job offers of $5,000 to $10,000 more than your loyal, tenured employee. That tenured employee must earn the same amount as the folks you just hired off the street. Achieve this by giving off-cycle, bump up pay whenever you notice salary disparities inside bands.