Fundamental Fix #1 to Assessing Pay Equity – Flip the Unit of Analysis

Gartner 25 Jan 2021 11:12

How do organizations conduct their pay equity analyses? I would argue that pay equity is not analyzed correctly.  Let’s jump in and start with the unit of analysis. You are probably wondering what I mean by “unit of analysis”. A unit of analysis is the entity that you wish to say something about at the end of your study (evidence 1). What do we want to say something about? We want to say how equitably the women are paid compared to men.

The Wrong Unit of Analysis

Guess what. Organizations use the wrong unit of analysis. The “ownership” of pay equity falls to the governments around the world. Those governments require companies to report on the status of their gender pay practices for the employees that reside in their country. So, what does that mean? Consider a company with 150 employees in France and another 150 employees in the United States.  The pay equity analysis is done twice … once in France and once in United States.

Here are the problems when the unit of analysis is the employees within a country:

The Right Unit of Analysis

“It is always the simple that produces the marvelous.” – Amelia Barr

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FranceUnited States
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