Comparable worth?refers to the requirement to pay men and women equal wages for jobs that are dissimilar but of?comparable?value (for instance measured in points) to the employer. This may mean comparing dissimilar jobs, such as nurses to truck mechanics. The question ?comparable worth? seeks to address is this: Should you pay women who are performing jobs?equal?to men?s or just?comparable?to men?s the same as men? If you only pay women who are doing the same jobs (equal jobs) as men the same as men, then the result may be to limit women?s pay rates to that of the lower-paid jobs in which women tend to predominate.
The concept by which women who are usually paid less than men can claim that men in?comparable?rather than in strictly equal jobs are paid more.
County of Washington v. Gunther?(1981) was a pivotal case. It involved Washington County, Oregon, prison matrons who claimed sex discrimination. The county had evaluated roughly?comparable?(but different) men?s jobs as having 5% more ?job content? (based on a point evaluation system) than the women?s jobs, but paid the men 35% more.102?Why should there be such a pay discrepancy for roughly?comparable?jobs? After moving through the courts to the U.S. Supreme Court, Washington County finally agreed to pay 35,000 employees in female-dominated jobs almost $500 million in pay raises over 7 years to settle.
Comparable worth?has implications for job evaluation. Virtually every?comparable worth?case that reached a court involved the point method of job evaluation. By assigning points to dissimilar jobs, point plans facilitate comparability ratings among different jobs. Should employers still use point plans? Perhaps the wisest approach is for employers to price their jobs as they see fit (with or without point plans), but to also ensure that women have equal access to all jobs. In other words, eliminate sex-segregated jobs.
Diveristy Counts: The Pay Gap
All this notwithstanding, women in the United States earn only about 80% as much as men.103?In general, education may reduce the wage gap somewhat.104?But gaps remain, even among the most highly trained. For example, new female medical doctors recently earned about $17,000 per year less than their male counterparts did.105?Reasons put forward for the male-female gap range from the outdated notion that employers view women as having less leverage, to the fact that professional men change jobs more often (gaining more raises in the process) and that women tend to end up in departments that pay less.106?In any case, it?s a problem employers need to recognize and address.
Board Oversight of Executive Pay
There are various reasons why boards are scrutinizing their executives? pay more than in the past. The Dodd-Frank Law of 2010 requires that American companies give shareholders a ?say on pay.? Law firms are filing class-action suits demanding information from companies about their senior executive pay decisions.107?The Financial Accounting Standards Board requires that most public companies recognize as an expense the fair value of the stock options they grant.108?The Sarbanes-Oxley Act makes executives personally liable, under certain conditions, for corporate financial oversight lapses. The chief justice of Delaware?s Supreme Court said that governance issues, shareholder activism, and other changes have ?created a new set of expectations for directors.?109?The Securities and Exchange Commission (SEC) requires filing detailed?compensation-related information, including a listing of all individual ?perks? or benefits if they total more than $100,000.110
The net result is that lawyers specializing in executive pay suggest that boards of directors (whose compensation committees usually make these pay decisions in large firms) ask themselves these questions:111
Has our compensation committee identified its duties and processes?
Is our compensation committee using the appropriate compensation advisors?
Are there particular executive compensation issues that our committee should address?112
Do our procedures demonstrate diligence and independence (including careful deliberations and records)?
Is our committee appropriately communicating its decisions? How will shareholders react?113
Total Rewards, Recognition, and Employee Performance
Financial and competitive pressures are shifting employers? attention from purely financial pay packages to what they call total rewards. As noted earlier,?total rewards?encompass the traditional financial compensation components. However, they also include recognition programs and redesigned jobs (discussed in?Chapter?4), telecommuting programs, health and well-being programs, and training and career development. Some employers distribute annual total rewards statements to employees to help them appreciate the full range of rewards that they are receiving.114
Non-cash rewards such as gift cards, merchandise, and recognition therefore play a rising role in compensation, because they are cost-effective and improve performance.115?After installing an online system that enabled employees at a West Virginia DuPont plant to award each other recognition, 95% were soon using it.116?International Fitness Holdings lets employees use a Facebook-type application to recognize peers by posting messages and sending private e-mails.117?Employers contract with sites like?Globoforce.com?to provide online recognition systems. As one consulting company says,
?In the next generation of talent management, organizations will . . . customize total rewards packages. Through personalized Web portals, organizations will offer rewards menus and associated dollar credits that are tailored to groups of workers and even individual workers. Dollar amounts will be tied to role and performance as opposed to age or seniority. Options offered will go beyond the traditional flexible benefits fare to include choice in work assignments and location, time and money for training, and working time flexibility. For example, AstraZeneca PLC offers workers customized rewards menus, allowing them to design the specifics of their rewards packages.?118