In its most basic of forms, the government’s recent announcement that from 2018, companies with more than 250 employees will be forced to reveal data on how much their male and female employees get paid seems like a good thing. Especially when recent statistics from the TUC show that the highest paid men earn up to 54.9 per cent more than their female colleagues.
However, if we dig into the proposal a little deeper, it isn’t all it seems to be on the surface. There are lots of factors that play into how much people are paid and those aren’t going to be taken into account in the new plans. For example, it doesn’t take into account whether those men and women are working full or part time. It’s only natural that more women will be working part time as they are usually the primary care givers and further we have an aging working population influenced by ‘old fashioned’ family values of Mum being the homemaker. It’s also going to depend on industry, for example IT and engineering have a very well documented issue with gender imbalance. While these industries are working to encourage more women to train and join that industry, it’s not a quick fix, making changes like that simply won’t happen overnight.
Focusing on pay alone is a very limiting factor – there’s so much more that needs to be taken into consideration when analysing performance in the workplace. Employers need to be focusing on the opportunities that they are giving their employees which enable them to develop their careers – this needs to be a structured approach and not a discretionary one.
However, the government has already mandated this process, and it is clear that there are some organisations in the UK that are going to need to focus on getting their houses in order and working out whether they have an issue they need to address before having to disclose salaries paid in 2016. One way to eliminate potential gender pay gap issues is by implementing a very transparent pay structure. That involves creating pay grades and defining the job types and roles that sit within them as well as benchmarking this internally, but also outside of the company within the wider industry. This is an activity that should be conducted annually across every department within an organisation.
Companies’ current appraisal processes will be an area that will need focus in order to iron out any potential issues with pay gaps. There should be a thorough calibration process in place which involves multiple stakeholders. This would not only involve the Human Resources department, but also heads of business units and people that work directly with that person. Eventual outcomes of that appraisal process should be evaluating that person’s performance over a set period of time, along with benchmarking them against their peers. It’s also important to remember that no two people are the same. Individual employees’ competencies and skill need to be taken into approach when judging their performance both in standalone and against their peers. This open decision making process provides a more balanced approach, and removes favouritism from influencing the decision.
Career development is a two way street, the company and the individual need to work together to determine what direction to take and which approaches to engage. Companies should support such development using the appropriate means which may include workshop, experiential, coaching or virtual/on line learning , help them conduct their jobs more successfully and position those that want to move up in the right place for opportunities in the present and in the future. This activity should feed into meaningful development plans, so people can have a say in what they are looking to achieve and where they are looking to succeed. Online training programmes can help to facilitate this – it means the individual can choose when and where to complete those training courses to develop those skills. It’s up to the individual to take the initiative to progress their career, while their line manager would have the option to see which courses they have taken part in and how they did. It’s vital that companies monitor and collect feedback to ensure that any training given is both supportive and effective.
Should companies of a certain size be forced into declaring their salary data? It’s a very blunt way of handling a very delicate situation. Lots of factors are going to feed into that data, and making that data openly available without publishing the context in which it sits is going to create more questions. While it is vital that the government looks to shame companies who purposefully pay men and women different salaries for the same job – it needs to be accompanied by consequences.