- Do you know how much your colleagues make?
- Would you like your colleagues to know how much you make?
A new law went into effect requiring California companies with fifteen or more employees to disclose salaries or salary ranges for all positions. Salary administration is a tough job. No matter how much some employees are paid, it’s never enough. Others are happy with their pay until they find out a colleague in a similar position is making more. The quality of the labor market is a factor also. When there are fewer talented prospects, top candidates wittingly or unwittingly create bidding wars that could cause internal problems.
Learn from my mistakes. This was the situation: I was a department leader and hiring officer. The talent pool in the field was limited. I knew the hiring officers in other organizations had their eyes on the same people I was interested in. I was authorized to pay top dollar to get them. I ended up hiring two of the four people I wanted most. That was great news until it was brought to my attention that the new staff was going to be paid more than some of my top performers. With the help of my supervisor and Human Resources, I was able to avert a pay equity issue that could have been detrimental to staff morale and/or lead to attrition.
I stumbled to the realization that salary administration systems need to be strategic. They need to help leaders and hiring officers attract and retain quality employees. In addition, salary administration systems should be flexible enough to allow for changing conditions and fluctuations within the organization as well as pay equity issues.
According to Sara D. Schmidt, PHR, “wage gaps across gender, race, and ethnicity in 2021 were profound. Compared to the median weekly earnings of White men working full-time, Hispanic women’s full-time earnings were just 58.4 percent, Black women’s 63.1 percent, and White women’s 79.6 percent. The wage gap widened slightly for women of color”. Addressing these inequities will be complex. In some organizations, salary administration systems are based on performance, which means annual increases are differentiated based on employees’ performance appraisal which could be influenced by implicit bias. This could cause the pay gap to widen. Increasing the base salaries of underpaid employees could lessen the gap but might create other problems. Salary administration is a tough job. I’m staying in my lane and leaving those issues to others.
Are you adequately compensated for the work you do? To learn more about my coaching practice visit www.ProDestinyCoaching.com