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Compensating Your Employees Fairly: A Guide to Internal Pay Equity

Book Description

Compensation fairness is a universal preoccupation in today's workplace, from whispers around the water cooler to kabuki in the C-suite. Gender discrimination takes center stage in discussions of internal pay equity, but many other protected characteristics may be invoked as grounds for alleging discrimination: age, race, disability, physical appearance, and more. This broad range of vulnerability to discrimination charges is often neglected in corporate assessments of how well compensation systems comply with the law and satisfy employee norms of fairness. Blind spots in general equity constitute a serious threat to organizational performance and risk management. In Compensating Your Employees Fairly, a respected practitioner and consultant lays out in practical terms everything you need to know to protect your company along the full spectrum of internal pay equity issues, including all the technical methods you need to optimize compliance and minimize risk.

Compensating Your Employees Fairly is a timely survey and comprehensive handbook for compensation specialists, HR professionals, EEO compliance officers, and in-house counsel. It provides all the information you need to ensure that compensation systems are equitable, auditable, internally consistent, and externally compliant with equal employment opportunity laws and regulations. The author presents technical information—both legal and statistical—in common-sense terms. Her non-technical breakdown of complex statistical concepts distills just as much as practitioners need to know in order to effectively deploy and interpret the standard applications of statistical analysis to internal pay equity. The focus throughout the book is on real-world application, current examples, and up-to-the-minute information on recent and pending wrinkles in the evolving legal landscape.

Readers of Compensating Your Employees Fairly will learn:

  • Why internal equity in compensation matters

  • How to detect intentional and non-intentional discrimination in compensation

  • The basics of statistical inference and multiple regression analysis

  • The essentials of data availability, measurability, and collection

  • The criteria for assessing compensation systems for internal equity

  • How to investigate potential problems and react to formal complaints and actions

  • How to avoid litigation and put in place ongoing measures for proactive self-auditing

What you'll learn

Readers of Compensating Your Employees Fairly will learn:

  • Why internal equity in compensation matters

  • How to detect intentional and non-intentional discrimination in compensation

  • How to investigate potential problems and react to formal complaints and actions

  • How to avoid litigation and put in place ongoing measures for proactive self-auditing

Who this book is for

HR professionals, compensation specialists, EEO compliance officers, in-house counsel, and employment attorneys will find invaluable the expert author's non-technical treatment of the technical issues that are essential to understanding all facets of internal pay equity. Without a working understanding of how to make their data tell a clear story, these various professionals cannot ensure that their compensation systems are equitable, auditable, and demonstrably compliant with equal employment opportunity laws and regulations.

Table of Contents

  1. Title Page
  2. Apress Business: The Unbiased Source of Business Information
  3. Dedication
  4. Contents
  5. About the Author
  6. Acknowledgments
  7. CHAPTER 1: Why Equity in Compensation Matters
    1. Federal Equal Pay Laws and Regulatory Climate of the Twentieth Century
    2. Equal Pay Laws and Regulations in the Twenty-first Century
    3. Proposed Legislation
    4. The Business Case for Internal Pay Equity
    5. Gender Equity versus Overall Equity
  8. CHAPTER 2: Types of Discrimination in Compensation
    1. Disparate Treatment
    2. Disparate Impact
  9. CHAPTER 3: Multiple Regression Analysis
    1. Correlation and Causality
    2. The Basics of Regression Analysis
    3. The Classical Linear Regression Model
    4. Interpretation of Regression Results
    5. Inferences of Discrimination
    6. Tools for Performing Multiple Regression
  10. CHAPTER 4: The Data
    1. Similarly Situated Employee Groupings
    2. Compensation Metrics
    3. Factors Explaining Compensation
    4. Data Measurability
    5. Accessibility of Data
    6. Data Collection and Assembly
    7. Data Cleaning and Verification
  11. CHAPTER 5: Regression Models of Equal Pay
    1. The Classical Model
    2. Separate Equations Model
    3. The Interaction Model
    4. The Overall Equity Model
    5. Other Models
  12. CHAPTER 6: Other Tests of Equal Pay
    1. Other Disparate Treatment Tests
    2. Disparate Impact Models
    3. Formal Statistical Tests of Disparate Impact
  13. CHAPTER 7: Analysis Follow-Up
    1. Red Flags and Problem Indicators
    2. Systemic versus Individual Follow-Up
    3. The Compensation Adjustment Process
  14. CHAPTER 8: The Changing Landscape of Pay Equity Enforcement
    1. The Ledbetter Fair Pay Act
    2. The National Equal Pay Enforcement Task Force
    3. The Paycheck Fairness Act
  15. CHAPTER 9: Causes of the Gender Pay Gap
    1. The 77 Cents Statistic
    2. A Closer Look
    3. Occupational Differences
    4. Industry Differences
    5. Prior Work Experience
    6. Hours Worked
    7. Career Interruptions
    8. Negotiation
    9. Compensation Expectations
    10. Cash versus Benefits Trade-off
    11. The Role of Discrimination
  16. CHAPTER 10: Litigation Avoidance and Proactive Self-Analysis
    1. Importance of Litigation Avoidance
    2. Business Case for Proactive Self-Analysis
    3. Required Data and Documentation
    4. The Compensation Self-Analysis
  17. APPENDIX: The Basics of Statistical Inference
    1. The Coin Flip Game
    2. Practical Significance
  18. Index