Table of Content
The report entails the most recommended approaches to providing equal and fair pay allocations irrespective of gender differences. By taking a critical review into legal and ethical considerations in assigning salaries, the report provides the most appropriate approach to providing equal pay to employees. These are recommendations that can be put in place by small, medium size as well as large organizations in order to ensure that there is equality in their payroll. The paper begins with a situation analysis of the current difference in the pay levels between male and female employees. A review of the Equal Pay Act is used to provide a clearer insight into the legal requirements with regard to provision of equal salaries to both men and women. Moreover, an ethical and theoretical perspective of the situation such as the Kantian and Utilitarian interpretations are used to encourage employers to put in place measures to control the situation. This leads provision of the best practices and policies that can be adopted by the company in ensuring that discrimination issues are eliminated. It is through this that the paper provides a summary of key points and recommendations that can be used to completely solve the matter within the institution.
In spite of the fact that women are hardly half of the size of the workforce in any organization, there is a challenge when it comes to allocation of payments. In most instances, the jobs that are performed by women are set to pay less when the paydays finally come. It would not be correct to conclude that these tasks require low level skills or are less demanding. The challenge begins with lack of appropriate policies that look into pay equity issues in the organization. As a result, it is time to come up with proper strategies that can be used to manage the workforce efficiently and give fair pay allocations to both men and women (Economic Justice, 2015, p. 2).
The Equal Pay Act (1970) provides that employers have the duty to provide equal pay to both men and women in the workforce. The Act stipulates that differences need only be realized when differences appear in job characteristics. Otherwise, men and women performing the same tasks need be paid equally. There are certain pillars in these jobs descriptions are made and any differences expected with respect to pay are provided for. These pillars include skill, effort, responsibility, working conditions and establishment (U.S Equal Employment Commission, 2012, p. 1).
The skills of an employee can be measured in terms of experience, ability to perform, education and training that is required to perform the job. In order to ensure that equal pay is allocated to the same rank of employees in a gender sensitive way, employers have to focus more on what skills are required for the job and not what skills the individual employees possess (Hartmann & Treiman, 2010).
Effort refers to the amount of physical and/ or mental exertion required to perform the job. In the event that both men and women utilize their efforts at the same level in any single job, then this needs to be reflected in the pay.
The Act defines responsibility as the degree of accountability that is needed to perform a job. Minor deviations in responsibility due to gender differences should not lead to inequality in pay allocation for the employees. Managers have to identify the unpreventable situations in which some sexes may be discriminated against with respect to responsibility, for instance, in the case of maternity leaves (U.S Equal Employment Commission, 2012, p. 4).
The clause requires that one job performed by two employees in the same working environment should guarantee equal pay to both of them. A deviation from this requirement would amount to gender inequality.
The prohibition that prevents against compensation discrimination only applies in the case of jobs that are within an establishment. The Act defines an establishment as a specific place of business and not the entire business or enterprise (Armstrong & Stephens, 2012).
Men and women performing the same job within the same environment may be paid differently due to certain discrimination causes. These reasons are provided below. In most instances, these reasons cut across all organizations; small, medium and large organizations.
More often, men earn more than women for doing jobs of equal value due to the way in which women’s competencies are valued compared to those of men. Jobs that are rated to have similar skills and qualifications or experience may be paid less when they are dominated by women (European Commission, 2011, p. 1).
The other reason as to why women earn less than women within the same institution is due to the discriminatory nature of the labour market. There are tasks that tend to be reserved for men at the expense of women. This is due to certain false perceptions that men would perform better in those positions. However, this is not the case, in most instances.
Discrimination is directly pegged to traditions and stereotypes. Traditions and stereotypes have a direct influence on pay differences. For example, when it comes to career choices, women tend to be ‘reserved’ for easier options that would attract less compensations. However, this is an option that organizations may not have control over (European Commission, 2011, p. 2).
Women find it more challenging to balance between social responsibilities and the responsibilities at the workplace. In case of performance-based payment systems, they may perform less compared to the men who are available for work in most cases.
A proper critique to the discrimination in payroll figures in a gender-bias can be provided on the basis of ethical theories. More specifically, the Kantian and Utilitarian theories can be used to explain the need to have a proper compensation system that takes into account the right measures for pay allocation and not gender-based decisions.
Immanuel Kant (1724-1804) developed a set of ethical theories that have been referred to by managers in making important organizational decisions and policies (Yount, 2011, p. 1). Kantian ethics tells people what morality keeps them from doing. The theory then does not tell you what you ought to do always. Some actions may be praiseworthy, but doing them may not yield the best results as could have been the case if they were not carried out.
Applying the Kantian ethics to the context of pay discrimination between men and women, it is indeed right to identify some jobs that only fit men. Moreover, women would also find specific jobs that they can handle best. However, this leads to situations of pay discrimination in the end. Therefore, Kant would require that they be no gender-based assignment of roles and duties in the organizations. People need to perform equal tasks, provided they have the same skills and required expertise (Yount, 2011, p. 3).
Kantian ethics have been applied by human resource managers in making sound employee-related decisions. From the time they were formulated, these ethical standards have been applied to many business contexts. Therefore, the recommendations developed need to be in line with the provisions of this set of ethics.
Utilitarianism is an ethical theory that stipulates that the rightness or wrongness of an act can only be based on the overall well-being of those affected by the act (Eggleston, 2012, 452). According to this theory, people are free to make decisions as they would prefer, but the overall outcome of their actions would be used to determine whether such actions are wrong or right. It is not the expected outcome but the actual outcome of an event that is used to rate it as either bad or good.
In light of the situation of pay discrimination, the outcome of the act is harmful to the women since it leads to economic imbalance in the society. There is need to put in place better policies that would help get rid of this negative implication of gender bias in pay allocation. The role of the human resource managers, therefore, would be to come up with a set of working policies that would help allocate payments equally to both men and women within the workplace. This would begin with fair assignment of roles within the organization.
The popularity of the Utilitarian theory of business ethics is as a result of its relevance to real-life and business activities. In reality, what is considered wrong would lead to harmful implications whereas the good acts would lead to positive impacts on those affected (Eggleston, 2012, p. 452).
In order to ensure that there is fair compensation to both men and women employees in an organization, the organization need to carry out an equal pay review periodically. An equal pay review involves making comparison between men and women’s pay in an organization. In the event of significant differences, an investigation into the causes has to be done. It is from this that policies and strategies are put in place to minimize the causes.
An equal pay review is a five-step process that any organization can perform periodically. First, the human resource managers are required to decide on the scope of the review and pre-determine the data that is to be required. This could be done on the basis of departments in the organization (Equality Commission of Northern Ireland, 2012, p. 5).
The second step in the review involves identification of sections where men and women are doing equal work. This is done with the help of the organizational structure and the departmental specifications of an organization. The third step involves collection of pay data and identification of equal pay gaps. In the event that pay gaps are realized, the data collected is moved to the fourth stage where reasons for the difference are established. The final stage involves putting in place policies and measures to solve the challenges (Equality Commission of Northern Ireland, 2012, p. 5).
Employees have to be informed of the entry salaries for the various job positions that are open to an organization (Equal Opportunities Commission, 2009, p. 16). Therefore, it is the role of the human resource managers to ensure that the entry salaries are adhered to. Any deviation from these initial agreements on the basis of gender discrimination or any other form would lead to challenges in the organization.
The organization need to set its compensation plans with regard to the legal expectations. All the payment parameters have to be considered in determining the payment strategies and setting the amount of salary for all the employees. It is important to allocate compensation to job positions and not to the holders of those positions. This would play a significant role in eliminating cases of discrimination.
Employees should be recruited into various job positions on the basis of their qualifications, skills and all the other requirements as per job descriptions. There should be no positions reserved for men or women. This would lead to differences in payroll structures in a discriminatory manner. There should be a situation in which both male and female job candidates have equal opportunities of recruitment into the organization.
The employment policies of an organization need to be adhered to. In the event that pay difference issues are not addressed therein, it is appropriate for the human resource managers to call for partial amendments of the excluded sections and include them in the organizational policies. This needs to be done in accordance with the Sex Discrimination Act (1984) that prohibits direct and indirect discrimination on the grounds of sex, marital status, pregnancy or even potential pregnancy (Commonwealth of Australia, 1998, p. 5).
It is, therefore, important for the organization to operate with regard to the legal and ethical elements of organizational performance. By borrowing from these theories, an organization would ensure that there is equity in payment systems. In addition, the organization needs to put in place measures such as equal pay review in order to discover any differences in payment between men and women in order to ensure that the organizational performance is driven by equity in payment and fair terms of employee compensation.
In order to ensure that the organization takes into account all the requirements with regard to remuneration allocations, it is important to put in place appropriate policies. The major steps that can be taken include:
- Fair terms of conducting recruitment and selection. This should be free of any pre-set elimination of some groups from certain job positions.
- Comparison of the organizational policies to the ethical theories; the Kantian and Utilitarian theories among many others. It is from this that sound decisions can be made with regard to fair pay determination.
- Decision-making based on standard law like the Equal Pay Act (1970) and Sex Discrimination Act (1982) in order to keep up with the legal perspectives of fair salary allocation.
- Regular equal pay review to detect and find solutions to any deviations in the extent of difference in pay gaps in the organization.
- Initial specification of the entry salaries so as to ensure that there are no disagreements among the employees with regard to pay differences based on gender.
Armstrong, M., & Stephens, T. (2012). A handbook of employee reward management and practice. London [u.a.], Kogan Page.
Commonwealth of Australia (1998). Equal Pay Handbook. Australia: Commonwealth of Australia. Available at: https://www.humanrights.gov.au/sites/default/files/content/pdf/sex_discrim/equal_pay.pdf [Accessed: 11 April, 2015]
Economic Justice (2015). The Simple Truth about the Gender Pay Gap. Spring. Available at: http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/ [Accessed 11 April, 2015]
Eggleston, B. (2012). Utilitarianism. Lawrence: University of Kansas. Available at: http://www.benegg.net/publications/Eggleston_Utilitarianism.pdf [Accessed 11 April, 2015]
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Yount, D. (2011). Immanuel Kant’s Ethical Theory; Rights and Duties. Messa Community College. Available at: http://www.saylor.org/site/wp-content/uploads/2012/02/BUS205-11.3.2-Immanuel-Kants-Ethical-Theory.pdf [Accessed 11 April, 2015]