Pay Equity & EAPs human resources

Pay Equity & EAPs What are the different types of pay equity and, in your opinion, which is the most important and why? How could you use an Employee Assistance Program in your company’s drug-free workplace and safety efforts? Does your organization have an EAP and/or would you recommend one? Why/why not? (use this to replace the ADA/Carpel Tunnel specific question from the text)

required reading:

Paye Equity

There are two types of pay equity, although some talk about a third in which employees “feel” fairly paid. In HR lingo, though, the two types are internal equity and external equity. Read more.

External equity is how a company’s wages/total rewards (bonuses, benefits, perks) compare to competitors. We look at companies in the same industry, by geographic location, by size, etc. From this data, we develop ranges for each position or group of positions in our company. Competitive wages are considered to be at the 50% mark. For example, if the range is $40,000-$75,000, the midpoint is $57,500. Companies have what’s called a pay philosophy – pay for performance, pay for longevity, cost-of-living (COLAs) adjustments, etc. They also take a stand on whether they want to lead the market (pay higher than 50%), be at-market (50 percentile), or lag the market (pay less than 50% and make up for it with other things like benefits).

Internal equity measures the wages of each position or group of positions (called a job family) and is set in ranges just like the external data. What we are doing with internal equity is separate from an external evaluation. Internally we are comparing wages of what one group earns to what other groups requiring similar skills earn. A job family may consist of the receptionist, entry-level admin assistants, and entry-level financial analysts. They share the same pay range of say $30,000 – $52,000. We look to see how equitable the pay is between everyone (based on performance or longevity or whatever else contained in our philosophy). We also break it down by role, by department, by location, etc. Job families in big companies can have thousands of employees, so there is a lot of data to compare in a billion different ways.

All of this plays into whether a company is not only competitive but whether there is any sort of pay discrimination based on protected class. Do X people get paid more than Y people? Are females paid less than males? This also connects to the topic of pay transparency discussed in this week’s forums.


Employee Assistance Programs To help maintain a safe and drug-free workplace, companies often utilize the services of Employee Assistance Programs, also known as EAPs. The following link takes you to the International Employee Association Professionals Association offering an overview of an EAP.
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