COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED 1

MEMBERPOLL:PayEquityProcess

July2017

Published by: Diversity Best Practices • 2 Park Avenue, 9th Floor, New york NY 10016 • DiversityBestPractices.com Copyright © 2017 Diversity Best Practices. All rights Reserved.

INTRODUCTIONPayequityisanimportantandincreasinglyrelevanttopicbeingtackledintheworkforce.WomentodaymakeupnearlyhalfoftheU.S.laborforceandaremorecommonlyworkinginpositionsandfieldstraditionallyoccupiedbymen.However,theworkingwomanintheUnitedStatesstillearnsfarlessthantheworkingman.In2014,womenworkingfulltimeearnedonly79percentofwhatmenearned.ThepaygapisevengreaterforAfricanAmericanandLatinawomen,withAfricanAmericanwomenearning64centsandLatinawomenearning56centsforeverydollarearnedbyawhitenon-Hispanicman.ThegenderwagegapcontinuestobeaproblemthatshortchangesAmericanwomen,minoritiesandminoritywomen.Theprocessofauditing,revisingandcommunicatingwithinthelegalparametersrequiresconsideration,planningandexpertguidancetomitigateriskandincreaseretentionandemployerreputation.InarecentDiversityBestPracticesmemberpoll,memberswereaskedaseriesofquestionsabouttheirpayequityprocessasitrelatestotheircompany.Eighteenorganizationsparticipatedinthepoll.Theseorganizationscrossedmanysectorsofindustry,includingfinancialservices,pharmaceuticals,insurance,manufacturing,healthcare,utilityandlaw.Resultsofthepollaredetailedinthisreport.

COPYRIGHT©2017BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

3COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

OVERVIEWOFPOLLRESULTSRespondents

Industry NumberofEmployees AnnualRevenue($)

BioPharmaceuticals 10,000 19B

ConsumerProductsManufacturing 11,000 7.6B

ContractFurniture 6,000 2BFinancialServices 4,300 1.37BFinancialServices 4,500 1.37B

FinancialServices 6,000 14.4BFinancialServices 17,000 5.7B

FoodManufacturing 7,700 5BHealthcare 5,727 18MInsurance 3,726 3.5B

Insurance 5,550 12.2BInsurance 9,000 Insurance 33,000

Law 900 Manufacturing 25,000US,74,000Global 14.5B

Manufacturing 80,000 16BManufacturing-Food&Beverage 40,000 17B

Medicaldevice 26,000 9B

Staffing 4,000 19.6BUtility 24,000

4COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

HasyourcompanyconductedPayEquityStudies(orisitintheprocessofconductingone)thatarenotpurelyforAAPcompliance?

# Answer % Count

1 Yes 60.61% 20

2 No 39.39% 13

Total 100% 33AreyoucurrentlyorplantobecomeEDGEcertified(GlobalBusinessCertificationStandardforGenderEquality)?

5COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

# Answer % Count

1 Yes 9.09% 1

2 No 45.45% 5

3 NotsureornotfamiliarwithEDGE 45.45% 5

Total 100% 11

Underwhattypeofprivilegehaveyouconductedorplantoconductthestudy?

# Answer % Count

1 InternalCounsel 50.00% 7

2 ExternalCounsel 50.00% 7

Total 100% 14

6COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Howoftendoyouconductorplantoconductpayequityanalysisstudies?

# Answer % Count

1 Annually 50.00% 7

2 Bi-annually 28.57% 4

3 LessFrequently 21.43% 3

Total 100% 14

7COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Whatkindofresourcesareyouusingtoconductthestudyintermsofthequantitativecomponent?

# Answer % Count

1 External 20.00% 3

2 Internal 40.00% 6

3 Both 40.00% 6

Total 100% 15

8COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Ifyouareusinganexternalresource,whattypeofexpertisearetheybringingtothetable?Pleaseselectallthatapply?

# Answer % Count

1 Organizationalpsychologist 0.00% 0

2 Complianceanalysts/experts 54.55% 6

3 Other(pleasespecify) 45.45% 5

Total 100% 11Other(pleasespecify)

Complianceandstatisticianexpertise

Both

Statisticians

9COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Whattypeofemployeegroupingareyouusingforcomparisons?

# Answer % Count

1 JobTitles 15.38% 2

2 JobGroups 23.08% 3

3 PayGroupings 7.69% 1

4 SimilarlySituated 23.08% 3

5 Other(pleasespecify) 30.77% 4

Total 100% 13Other(pleasespecify)

Alloftheabove

Paygroupsandjobgroups

Jobcode,paystructure,country,timeatcompany,timeinjob

JobTitles,jobgroups,paygroupingsandmanagementlevel

10COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Whatmethodologiesareyouusingforthepayequityanalysis?Pleaseselectallthatapply.

# Answer % Count

1 OFFCPtypemethods 16.67% 2

2 Multivariateregressionanalysis(non-OFCCP) 75.00% 9

3 Other(pleasespecify) 8.33% 1

Total 100% 12Other(pleasespecify)

Basepayanalysesbyjob,grade,andgender

11COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

IfyouuseOFCCPmethods,whattestsdoyouconsider(2%,t-test,etc.)

# Answer % Count

1 100.00% 4

Total 100% 4Other(pleasespecify)

AverageandMeanpay

T-testand2%

12COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Howdoyoudeterminetheneedtoinvestigatefurthertodeterminedifferences?Pleaseselectallthatapply.

# Answer % Count

1 2standarddeviationsinaverage/mediancompensation 22.22% 2

2 %ofdifferenceinaveragecompensation 33.33% 3

3 Apayrangespread 0.00% 0

4 Other(pleasespecify) 44.44% 4

Total 100% 9Other(pleasespecify)

Setvariationfromexpectedresults

Havenotgottentothatstepyet

1.96standarddeviation

1.5standarddeviationinaverage/mediancompensation

13COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Areyouusingaspecialsoftwaretoconductthestudy?

# Answer % Count

1 Yes 0.00% 0

2 No 66.67% 8

3 Ifyes,whichvendor'ssoftwareareyouusing? 33.33% 4

Total 100% 12Ifyes,whichvendor'ssoftwareareyouusing?

Mercer

Notawareofthesoftwareexternalcounselisusing

PayStat

Outsolve

14COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Doyouinformemployeesthatyouareconductingorhaveconductedapayequitystudy?

# Answer % Count

1 Yes 27.27% 3

2 No 72.73% 8

Total 100% 11Ifyes,doyousharetheresultsofthestudyinaggregateorataveryhighlevelwithyouremployees?

15COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

# Answer % Count

1 Yes 22.22% 2

2 No 77.78% 7

Total 100% 9Ifyoufindpaydisparities,howdoyoumakethepersonwhole?

# Answer % Count

1 Retroactively 0.00% 0

2 Adjustgoingforward 100.00% 10

Total 100% 10

16COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Howdoyougoaboutremedyingpaydisparities?

# Answer % Count

1 Allatonce 38.46% 5

2 Over2-3years 53.85% 7

3 Morethan3years 7.69% 1

Total 100% 13

17COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Howdoyouprioritizetheremedy?

# Answer % Count

1 Targetspecificemployees/roles 18.18% 2

2 Employeeswiththelargestpaygaps 18.18% 2

3 Allemployees 27.27% 3

4 Other(pleasespecify) 36.36% 4

Total 100% 11Other(pleasespecify)

LookingatrolesaswellaspaygapRemediesareevaluatedforallEEs.Variouscriteriausedforcompetitivepositioningbasedongradestructure.HavenotgottenresultssodonotyetknowtheimpactLookingatlargestdisparitiestobefixedover2adjustmentsandsmallerdisparitiesin1adjustment.

18COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Atwhattimeoftheyeardidyouordoyouplantomakeadjustments?

# Answer % Count

1 Atreview/merit/bonustime 61.54% 8

2 MidYear 23.08% 3

3 Offcycle 15.38% 2

Total 100% 13Doyouinformtheimpactedemployeesthattheywouldreceiveadjustments?

19COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

# Answer % Count

1 Yes 76.92% 10

2 No 23.08% 3

Total 100% 13Ifyes,whatexplanationdoyouprovidetotheimpactedemployeeswhenmakingadjustmentstotheirpay?

# Answer % Count

1 Thatyouwanttobringthemuptothemarket 44.44% 4

2 Thathe/shewouldcontinuetogetadditionaladjustmentsoverthenextfewyears 0.00% 0

3 Otherexplanations(pleasespecify) 55.56% 5

Total 100% 9Otherexplanations(pleasespecify)

CombinationofmarketandinternalfactorsChangesaretypicallyaddressedasequityadjustmentsbasedonpositionevaluation,performanceand/ormarketcompetitiveness.Notyetsurewhatthecommunicationplanwillbe

Marketandinternalequityreview

Deviationfound,stepsbeingtaken

20COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Ifyouhaveusedanexternalresourcetoconductthepayequitystudy,whathasbeenthecosttoyourcompany?Pleaseprovidethecost,asapplicable.

Costfortheentirecompanyasonestandardentity($)

Costperdivision/businessunit Costbylocation

25,000

25,000

Studyconductedinternally Studyconductedinternally Studyconductedinternally

75,000

10,000-15,000

100,000

5,000

21COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTSRESERVED

Didyouuseorplantouseexternalconsultationservicestohelpwiththeremedyprocess?

# Answer % Count

1 Yes 25.00% 3

2 No 75.00% 9

Total 100% 12Ifyes,whathasbeenoristheexpectedcostofconsultationsservices

IncludedinabovedataIncludedintheabove10,000-15,000wewouldhavethemrerunthenumberswiththeproposedadjustmenttomakesureittakescareofthesituation