Salary equity: what it is and how to apply it in the remuneration policy

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Salary equity: what it is and how to apply it in the remuneration policy

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THE wage equity is related to equal pay for professionals who perform the same function within organizations. This is a topic that is widely discussed within companies, as in many of them there is a great wage distinction.

And this is not restricted only to gender issues, as in many professional organizations that do the same job they earn different salaries.

The big issue is that in the current scenario, wage equity is seen as essential. Whether to maintain a good reputation of the company in the market as well as retaining talent and increasing the company's productivity.

To change this scenario, many companies have been adopting a salary equity policy that prioritizes a fairer job and salary plan.

In this article you will get to know the impacts of wage equity and you will learn how to develop it within your company.

What is wage equity?

Wage equity refers to the payment of an equal salary for people who work in the same position. That is, if a task requires the employee to do the same skills and abilities, they should receive the same amount.

Salary equity is provided for in Articles 460 and 461 of the CLT, which says that:

Art. 461. If the function is identical, all work of equal value, rendered to the same employer, in the same business establishment, will correspond to the same salary, regardless of sex, ethnicity, nationality or age. (Wording given by Law No. 13,467, of 2017).

However, the issue still generates countless discussions since many companies find loopholes in the law to follow the remunerations they want. Especially when it comes to gender pay equity.

A survey of the Quero Bolsa website, based on CAGED data, revealed that only in 25% of professions the salary of men and women is the same.

But this distinction is not restricted to gender alone. IBGE data showed that in relation to color and race there is also no wage equity. Whites earn 72% more than browns and blacks.

The benefits of wage equity

Companies that adopt a strategic remuneration policy are able to have a more transparent relationship with their employees.

Including allowing a greater incentive for employees to evolve in their careers and feel valued with fair wages. Among the main advantages for those who adopt wage equity in their routine, we can highlight:

Increased productivity

An employee who feels valued tends to increase his productivity and consequently is more engaged with the company's projects.

Gender or race wage equity values ​​what really matters on the professional side, which are the abilities of each one to perform the function.

Retaining talent

If the company distinguishes its employees and pays more for one and less for the other, even if the two are exercising the same function, the chance of the employee who earns a smaller amount to feel discriminated against and devalued is very great.

As a result, it is more difficult to retain talent and the turnover tends to be much greater. Since professionals will always be on the lookout for new job vacancies that offer a greater professional appreciation.

Improves the company's image

Companies that treat their employees are also able to strengthen their employer branding, also creating a good image of their brand in the market.

This makes it easier to attract talent, suppliers, investors and also retain those who are already part of the company.

Salary equity models

The concept of salary equity, even if it is not part of an effective and planned career and remuneration plan, is part of the routine of all organizations.

In most cases, it is common for companies to use three salary equity models to base their remuneration:

  1. external competitiveness: occurs when the remuneration of companies is based on the salaries paid by their competitors.
  2. internal alignment: in this case, all the employees' salaries take into account the positions within the company and the remuneration is made by functions and skills.
  3. value for productivity and contribution: in the productivity model, remuneration takes into account the performance of each professional and, in many cases, length of service. Thus, some may earn more than others because the remuneration is more individualized.

How to develop a good remuneration policy with equal pay? Step by step

To make wage equity a reality within your company, it is essential to develop a good remuneration policy. Through it, the company is more likely to make employees feel valued.

But how to develop a remuneration policy to achieve wage equity? We have separated 4 tips to make this process more assertive.

1. Describe the roles and functions

Describing the job in detail with the necessary skills and competencies required for the role is the first step. This helps to build wage equity with standardized remuneration for each position, avoiding distinctions.

For this, count on the support of managers, coordinators, directors and employees themselves so that the positions and functions are built in an assertive manner.

2. Assess your competitors

Market competitiveness is increasing, so doing a salary survey in relation to your competitors is essential.

This is because a salary below the market can discourage employees and create in them the feeling of being devalued.

Therefore, in order for wage equity to be effective, talk to your employees, compare your pay in relation to companies in the same segment.

Also ask the team questions about the benefits it values ​​so that its remuneration policy works.

3. Conduct an internal salary survey

No one better than your employee can say whether he thinks the salary he earns is fair or not. In this way, a internal salary survey can make your company discover whether employees are satisfied or not.

With this base, it is easier to achieve wage equity and define corporate values ​​and benefits so that employees feel valued and are more engaged with the company.

4. Maintain financial balance

There is no point in valuing employees if your company is unable to live up to its promises. Therefore, it is essential that the remuneration policy is in accordance with the your company's budget.

After all, wage equity is also part of a financial balance of the organization. This is because if there is no such planning, the company may have problems to be able to afford the wages and even suffer future labor lawsuits.

Wage equity is a competitive differentiator

Wage equity tends to be a major competitive differentiator in the market. Companies that do not create any kind of prejudice, whether of gender or race, in the payment of their remuneration, are well regarded by professionals.

This makes it easier engaging, attracting and retaining talent in the company. But this only becomes possible when the organization is aware of the importance of each member of its team and places professional valorization as a crucial point for success.

And the key point for wage equity to be effective is the creation of the remuneration policy – it ends the wage distinctions and distortions for each position once and for all.

That is, if a collaborator is in the same role as the other and performs the same tasks, heand will receive the same salary, according to the planned remuneration policy.

And what do you think of wage equity and how does your company approach this issue internally? Leave a comment on the article and let us know.

Technology for managing salaries and remunerations

The HR Consultant UK Human Resources platform has a useful and innovative tool for organizing salaries and wages: HR Consultant UKy.

This system will transform the relationship of your employees with their own salary.

By registering in the system, your employees can withdraw their payments whenever they want in a simple and instantaneous way. HR Consultant UKy has already brought results for several companies such as:

  • 10% increasing talent retention;
  • 20% improving the productivity of its employees;
  • 100% increase in attracting applications for new vacancies.

Learn more about HR Consultant UKy and add that benefit to your company's team.

Follow HR Consultant UK on Facebook, Instagram, Twitter and LinkedIn and stay on top of all our news.

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