Equal Opportunity In Compensation

We tend to focus on salary when talking about jobs, but total rewards and compensation are an entirely different beast. Compensation is only part of what an employee gets as consideration for the work contracted for. Total rewards are a wonderful assortment of goodies that include pay, benefits, work-life balance benefits, performance recognition, career development and advancement. In a Helios HR September 1, 2021, article “Employee Total Rewards Vs. Compensation: What’s the Difference?” authored by Sarah Shepherd, she aptly describes total rewards as a banana split that includes not just the banana, but all the toppings and extras.

Level Playing Field

Equal opportunity mandates that employees ought to compete on a level playing field for opportunities. That means the terms of engagement must be the same for all. Equity simply implies fairness in the application of the terms of engagement and in the governance of employees. Those lofty goals have materialized in their application in the workplace, and it is for this reason that certain laws exist to mete out justice, so to say. It is in the context of the forced integration of equitable laws and the bona fide efforts by organizations to meet the dire needs of equal opportunity and equity in rewards and compensation that this query will be addressed in the paragraphs that follow.

The most visible area for these issues is in the very stubborn racial and gender pay inequality. This is despite laws that have existed for decades against these practices. The Equal Pay Act of 1963 requires that men and women be given equal pay for equal work. The same requirement has been in place for race, color, religion, sex, and national origin under Title VII of the Civil Rights Act of 1964 (as amended) which prohibits discrimination in compensation and other terms and conditions of employment, thus broadening the provisions of the Equal Pay Act.

There is also pernicious persistent pay inequity relative to the disabled and older workers prohibited under the Americans with Disabilities Act of 1990 (as amended) and violation of the Age Discrimination in Employment Act of 1967, respectively.

Pay Transparency

Jobs do not have to be identical to warrant equal pay, but they need to be substantially equal and performed under substantially equal working conditions. Pay in this context includes salary, overtime pay, bonuses, paid time off, club memberships, golden parachutes, charge accounts, stock options, executive perquisites, restricted stock shares, hotel, and travel reimbursements. So, it is not okay, to use a simplistic example, to establish charge accounts for women and minorities at say Motel 6, while establishing for similarly situated non-minority males charge accounts at say XV Beacon Hotel.

The correction of pay inequality is not to reduce the pay of the advantaged group to match the lower pay of the disadvantaged group. The employer’s obligation is to increase the pay of the disadvantaged group and take remedial actions with respect to back pay, benefits, promotions, and lost opportunities for advancement. Decisions in compensation and benefits must thus be grounded in job-related characteristics and bona fide business factors like education, qualifications, competencies, certifications, relevant job experience, skills, performance, and contracts, for example. In the era remote work, it is important to realign rewards and compensation to be geographically equitable.

Organizations should consider their positions on pay transparency as it not only sends a powerful message that the organization has nothing to hide, but that it values trust and equity in its pay structure.

Recognition and Fairness

Recognition programs are effective tools for organizations to show appreciation to their workforce. These tools can be powerful in promotions, pay, trips, corner offices, bigger desks, job rotation, compliments, milestones, gifts, training, bonus, tuition, and benefits. These programs in organizations must be grounded on equal opportunity and equity. It is human nature to crave recognition whether one is sweeping toilets or is a CEO of an organization.

Good managers understand that fairness goes hand in hand with recognition and rewards and should make these programs meaningful to the employees. All rewards are not equal and are not equally relevant for all employees. However, they must be awarded in a way that is equitable so that though not the same are nevertheless equal. There can be no playing of favorites. The measure of recognition must be objective and apply to all equally. “All” here connotes every person on staff from top to bottom. It is acceptable to tailor recognition programs for different departments, but their value must be equal. A well-run recognition problem can make all the difference in retention, job satisfaction and an overall positive organizational culture. It is critical that organizations remove managerial discretion in the award of recognition rewards as biases and favoritism inevitably creep into those exercise of discretion.

Emphasize Well-Being

Well-being is another area where organizations should pay close attention to inequities. Our physical health is inexorably tied to our well-being. Our mental health has a great impact on our physical well-being. Thus, from our desks, keyboards, screen times, lunch time, stress levels, ventilation, hours of work, noise, pay, time off, to interactions with co-workers and managers all have impact on how well we function.

Well-being includes programs focused on the success of employees in and out of the workspace and have direct impacts on employees’ health, behavior, absenteeism, productivity, and retention. In the era of social justice reforms, burnout, and the Covid-19 pandemic, it is even more important that great care is taken in crafting these programs to deliver to the wide swath of employee needs. Greater care must be paid to the disabled, chronically disadvantaged groups, those who are primary caregivers, and those employees that care for their parents or grandparents.

Conclusion

Finally, when dealing with career development and advancement, it is crucial for organizations to be mindful that promotions, mentorships, training, and succession planning are equitable, diverse, and inclusive. While not everyone is on or wants to be on a management track, programs must reward equitably. While these programs must align with the organization’s competitive and strategic goals, they must be structured to allow an equal access to opportunities for progression of skills, competencies, and responsibility to meet the employee’s aspirations irrespective of personal background.