Does Your Company Culture Clash over Equitable Pay?

Nothing can shake up a company culture more than an imbalance in compensation. Oftentimes, there was no strategy in place to manage increases and starting salaries, which can cut into profitability and may hurt morale if salary information is disclosed.

 Government Clash on Pay Equity

State and local governments are taking action on pay equity, while the federal government is not currently active with legislation on this issue. California’s AB 168 is now in effect, and it bans employers from asking about salary history on applications and in salary discussions with applicants. Such legislation is important in supporting efforts to limit pay discrimination. If someone starts their career at low pay compared to the market value for their skill set, that inequity tends to compound over their career. There is a perpetual imbalance when potential employers are permitted to set pay levels based upon salary history.

 Link Between Equitable Pay and Organization Culture

How does employee engagement tie in with equitable pay? Companies and non-profit organizations which have sound pay structures not only make the most of every dollar they spend on compensation, thus increasing their ROI, but also support a culture which reflects a high value on employee contribution. Paying people based upon their skill and experience level, as well as their job performance, is foundational to attracting and keeping the best people for jobs in any organization – and is essential to complying with the many local, state and national pieces of legislation referencing fair and equitable pay. So being in compliance is also good for your culture.

 Compensation Compliance that Improves Culture

Complying with California AB 168 and other pay equity legislation calls for pay structures based upon sound market data and appropriate internal comparisons of jobs to one another. Conover Consulting, Inc. has worked with hundreds of organization leaders over more than two decades in setting competitive, appropriate pay structures. With careful analysis and competitive market intelligence, we help you formulate a strategy that not only improves employee retention, but serves as an excellent recruitment tool. Learn more about compensation analysis and pay structures at Conover Consulting.