Pub. 10 2020-2021 Issue 6

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org 20 Establishing and Maintaining Pay Equity BY JOSH WHITTAKER, KEVIN KUSCHEL AND SIDNEY DIEC I n a previous article written by L&A in 2018, the grow - ing concern of gender pay gaps and how they impact attraction and retention issues in corporate America was addressed. Through this process, it was discovered that the pay equity gap was not as serious as previously thought — at least to the extent as portrayed in political circles and media outlets. The incorrect messaging generates doubt and forces the questioning of historical practice and future application of compensation programs. As compensation professionals, should we not concern ourselves with ensuring equitable pay programs across our organizations? Is there a need to contin - ually monitor pay programs to ensure a gap is not unknow- ingly created? The answer is yes, but how do we ensure pay equity is properly established? While studies have shown that most companies have done a good job of properly aligning pay, independent of race, age or gender, there remains a need to establish and maintain equitable programs based on these factors. Of course, organi- zations must also be careful not to take this approach too far, disallowing adjustments for more “justifiable discrepancies,” such as tenure, experience, education level and performance. These are the true drivers of competitive programs, and if improperly managed to ensure personal bias is excluded from the process, the effectiveness of compensation pro - grams is compromised. Strict adherence to pay equity without considering distinctions across employees with similar duties can be detrimental to your employees’ morale and commitment and the integrity of compensation-setting best practices. Compensation programs should take into consideration pay equity of similar positions but should not dictate how those plans reward the employees who distinguish themselves. Knowing when pay discrimination is justifiable and how to mitigate potential litigation in the future is critical to your organization’s success. Below are some methods to consider for establishing the foundation for justification: • Developing comprehensive job descriptions that clearly define the differences in responsibility between jobs and each job’s levels.