Getting suggested remediation actions
In previous steps of your journey, you have explored and developed a robust compensation model integrating the key drivers of pay within your organization. You are now familiar with the pay equity analysis result, you know how the key drivers of pay interact and you understand the areas of pay disparity across your demographics.
The next question to ask yourself is "How can my company do better?".
Follow the three steps detailed in the sections below to configure the analysis with raise suggestion to obtain remediation actions from the system to achieve your pay equity goals/targets based on your compensation model.
To start getting remediation actions, once you are sure you have a good and stable model that you want to use to make salary decisions, check the Compute raise suggestions box when running an analysis. After having done so, new sections are displayed in the analysis settings page.
Defining your pay equity target
The optimal raise suggestions for individuals may differ based on your overall goal. By understanding your goal, the system can ensure that any remediation actions are targeted towards it. You can define your target based on the insights you obtain from the analysis or based on other constant factors such as policies or budget.
To define your pay equity target, you need to set your goal for the optimization in the Pay equity target section of the page. This can either be a target pay gap or a target budget:
To define a target gap, select the Target pay gap option. If you want to completely close your pay gap, set the target pay gap as 0%.
To define a budget, select the Target budget option. If you have a specific budget for pay equity related increases, then set that as your budget.
Setting your raise configurations
When closing pay gaps in practice, there are always restrictions on how raises should be allocated. By defining the highest possible raise for an individual (along with other optional configurations), you ensure that the raises suggested match your realistic needs.
In the Max raise field of the Raise configuration section, set the maximum raise percentage you want to give to any individual.
Configuring the focus of the raise algorithm
In the Cost effectiveness/Fairness balance and Individual fairness/Group fairness balance sections, you can adjust the focus of cost-efficiency vs fairness.
You can adjust the focus between individual vs group fairness. The individual fairness method assigns raises to employees who are underpaid, relative to what the model expects their salary should be. The group fairness method assigns raises to employees who are in groups that have large pay gaps, or have characteristics that are more rewarded for the overpaid gender. Individual fairness is good for correcting outliers at the low-end, but can cause some wage compression. Group fairness closes the gap while preserving the existing relationships between employees in the same demographics, but may end up giving raises to relatively overpaid employees.
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Keep in mind that it is optional to control these values and your default values have been set at 50% to capture different areas at once. Raises are given at the lower end of the distribution, but usually the more raises are also given where the gap is coming from to avoid the worst wage compression.