A man and a woman are hired at the same time. The man is earning a base salary of $85,000 and the woman is earning $70,000.

The man earns a 3 (meets expectations) on a 5-point performance rating scale every year. This leads to a 3% merit increase every year.

The woman earns a 5 (outstanding) on a 5-point performance rating scale every year. This leads to a 3.75% merit increase every year.

How many years will it take for the high performing woman to have a base salary that exceeds the man?

27 years

That's a long time.

Don't underpay people when you hire them.

When you recognize you are underpaying an employee, fix it. Make sure you have a budget for internal equity adjustments. This budget needs to be established each year and should be in addition to your normal merit budget.

(Inspired by Thomas Carnahan, Ph.D.)

#payequity #paytransparency #compensation #rewards #humanresources #hr #genderpaygap #paygap #discrimination