The biggest mistake companies make in the pay gap is to give women lower pay just because they are women. It is important to note unfair pay is not gender-specific. In some cases, men are paid less than women for the same job. But it's also true that women are often paid less than men in the same position, even after controlling for factors like education and experience. It is hard to deny the fact that the gender pay gap is a real issue. So, what can we do about it? The good news is that we can take lots of steps to prevent workplace inequality. Here are some steps every company can take to close the gender pay gap.

Implement Fair Compensation Structure

Ideally, companies should implement a fair compensation structure that is equal for both genders and all races and ethnicities. This will only happen if the HR departments of the companies can make such a structure. M500 exclusive remuneration reports can help HRs by providing detailed information about the salaries, bonuses, commissions, and other financial benefits of male and female executives, allowing them to price jobs accurately while maintaining a gender pay gap in the company.

Some Tips for HR to fix pay disparities:

• Conduct a pay audit: Compare the salaries of men and women performing similar tasks. In order to calculate pay, an audit can take into account anything important to the company, such as education, experience, responsibilities, and performance.
• Eliminate disparities in pay: It's a good idea to review compensation every year. HR can use consultants and salary surveys to determine the market rate for a position.
• Eliminate bias when hiring: Be sure to train your employees about unconscious biases. In addition, analyze job postings to eliminate language that is likely to turn off female candidates.

Analyze Which Compensation Model Is Most Appropriate for Your Company

Companies are using compensation models to ensure that they are paying their employees fairly. The three common types of compensation models are straight salary, performance-based pay, and commission-based pay. The aim is to make sure that the high-paid positions are evenly distributed between men and women. It helps close the gender pay gaps because it reduces the bias effect where people are paid differently for the same role because of gender differences.

Transparency in Pay Is Key

Companies should make their pay scale to be transparent. This will do the work of making sure they do not discriminate based on gender, race, or ethnicity. Be transparent about how you calculate salary increases and how you determine pay and benefit structures for your staff. Some of the actions that can be taken are setting gender-neutral target rates, providing equity incentives, restructuring performance criteria, and providing transparency around executive remuneration.

Conclusion

A company cannot guarantee that it will have a fair compensation structure and that the gender pay gap will not exist through specific practices. It is important to design and establish a clear compensation structure that is reliable, equitable, and transparent. Furthermore, to avoid the gender pay gap, the company needs to review the structure of the compensation on a periodic basis to ensure that it remains equitable. In addition, the companies need to provide training to managers and employees to ensure that they understand and are confident in the structure of the compensation. As a last way to avoid the gender pay gap, there could be a compensation committee in the organization comprised of the most senior management members who understand the structure of the compensation and can oversee the implementation of any changes to the structure.
Feel free to reach MERIT500 to get deep insights to create and implement effective compensation strategies in your organization.