Women’s wages still remain about 70% of men doing a similar job and one of the quickest ways to change that for yourself personally is to know what your colleagues are earning. In fact, famous cases like Charlize Theron earning an additional $10 million in a movie she made by demanding equal pay to her co-star demonstrate the large discrepancy that can happen if you don’t ask.
However, that also means that as a woman entrepreneur you want to set up your own company with transparency from the beginning. It can be so easy to pay someone more than another person because you are more comfortable with them. Yet, that is the trap that has kept women from earning the same as men from a workforce where bosses tend to be male.
Pay can be an emotional issue and how you handle transparency will be an important element of your company culture.
You will want to really assess the value of each job and the range of pay you are willing to pay anyone who does the job well. Does that mean qualities like someone you know will get the job done the way you want it and on time can’t be compensated over someone who does the bare minimum? Absolutely not. It just means you have to be able to articulate it to anyone who asks, and know what it is worth.
Keys to setting up a transparent organization are:
- Be willing to answer questions with facts about pay, pay ranges and opportunities for advancement and avoid genralities.
- Create job descriptions, even if they are fluid, so you have a benchmark.
- Research equivalent jobs online and what the average pay for that job is in your geographic area. Here are some resources to help you do this:
- Be consistent with your choice in how much you share and when once you make the policy around pay.
- Be transparent about the methodology used to make compensation decisions, even if you do not give out individual pay information.
- You might implement collaborative job and pay reviews. This can help people understand what is valued and what they can do to improve their skillset while ensuring everyone has equal access to the information and to giving input on the results.
- Be willing to have some uncomfortable discussions that will come with full disclosure.
Obviously in a group of people with the same jobs it’s easy to have transparency and it can even create incentives for growth for those lower on the pay scale; however jobs with completely different skillsets and people in them who have been with the company very different amounts of time are hard to compare.
If you choose to be completely transparent, radically transparent as the new trend is called, make sure you have identified the elements that you value that are causing what might otherwise look like discrepencies or preferential treatment.
You still make the decisions on pay in a radically transparent organization. You just need to be better capable of explaining them.