What do we mean when we talk about ‘Equal Pay’? Fundamentally, equal pay is a legal requirement as set out in the Equality Act 2010 to ensure that men and women are paid equally for performing the same work or work of equal value.

However, rather than just being about compliance and mitigation against expensive tribunal claims, organisations should view Equal Pay as an opportunity to demonstrate that they are doing more than the bare minimum. By being confident and proactively communicating their commitment to Equal Pay, organisations can demonstrate their commitment to fair treatment, and reaffirm that the contribution of men and women is valued equally. This is not only something to celebrate but the right thing to do – this is where responsible reward comes into play where doing the right thing can add value to your organisation.

There are a number of ways in which Responsible Reward can be measured and I would like to share my thoughts on how Equal Pay can link to these.

Governance
First and foremost, it is essential that HR and Reward can be confident that potential areas of Equal Pay concern have been thoroughly investigated, justifiable and defensible reasons for apparent instances of discrepancies in pay levels have been identified and documented, and genuine equal pay issues have been addressed. Not only does this mitigate against potential equal claims – on average almost 29,000 equal pay claims are submitted each year – but it also puts HR in the driving seat to create and maintain a culture where men and women are treated equally and fairly.

Equity
Equal pay is just one lens through which pay equity can be measured, and it is very often a good place to start. As already mentioned, pay equity between men and women performing the same work, work rated as equivalent, or work of equal value is a legal requirement, but many organisations struggle to evidence the latter if their roles have not been levelled using a robust and analytical job evaluation framework. Pay equity goes further than just the basic compliance with legal requirements; it is ensures that pay decisions are based on objective criteria, free from bias relating to personal or physical attributes, including gender, and when appropriately communicated demonstrates to employees (current and future) that your organisation is committed to transparency and fairness around pay.

Diversity & Inclusion
Objectivity and transparency should be key ingredients in all aspects of the employee experience however by actively demonstrating this approach around such an emotive and fundamental element of the employee deal such as pay and pay decisions, this can help encourage a culture of diversity and inclusion where people feel that they are treated fairly and consistently regardless of gender, race or minority. Ultimately this will positively impact the employer brand and reputation as being an organisation that values diversity and inclusion and elevate the organisation to an ‘employer of choice’.

Wellbeing
As mentioned above, equal pay forms part of the employer’s duty to ensure and demonstrate that employees are treated fairly with regards to pay; failure to do this can damage the employee’s confidence in their employer in terms of integrity and objectivity around pay decisions. This in turn can negatively impact the employee wellbeing and happiness at work and ultimately lead to underperformance and destabilisation of the workforce. Being informed and open to discussions around your organisation’s equal pay position will contribute to employee wellbeing as employees will be confident that it is taken seriously and pay decisions are made free from bias and discrimination.

Contribution
Having a clear stance on your equal pay position, with transparency and communication around pay equity and fair and objective pay decisions, can help to build a diverse and inclusive workforce as well as having a positive effect on employee wellbeing. All these ingredients help to build an engaged, happy and productive workforce which will ultimately create value for the organisation.

If you would like to know more about our Responsible Reward Index and how it can be applied in your organisation, or if you’d like support with Equal Pay, please do get in touch. I can be reached via email (Alastair.cole@innecto.com), or you can call me on +44 (0)20 3457 0894.
 

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