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Vermont Leaders

for Equity & Equal Pay (LEEP)

Toolkit Launch!

June 8, 2021

Sadowski

Consulting

Services

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Agenda

Where the Toolkit Came From

Who Should Use It

What’s In the Toolkit

Sneak Peek Inside!

Examples of Charts & Insights

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How did the Toolkit Come to be?

A national movement…that left small companies behind
2 consultants who saw a need
7 courageous companies committed to leading in pay equity
A team of supportive partners collaborating together to launch a pilot program

1 year
8 peer exchange cohort meetings
3+ 1:1 consulting sessions with each company
All 7 completed pay equity assessments and initial pay equity plans using the EMT
Ongoing piloting and refining new assessment tools and instructions

Months of iterations based on company & community feedback to deliver “THE TOOLKIT” to empower small companies to achieve and maintain pay equity!

been doing compensation work for many years
increasing focus on pay equity
VT companies have a long history of leading in best practice
a lot has developed in the field for large companies
but not many resources for small companies
yikes!
Frank & Krysta doing pay equity work with companies individually, but saw a need for more standard approaches and tools that copnaines could apply themselves to really accelerate pay equity as a standard business practices for small to medium sized companies
after a few years of conversations with the Change the Story team, lots of good nudging from business leaders like Duane - asking when we would be ready - we finally convened 7 companies for a year long pilot project to
focus on empowering companies with the knowledge, tools, and skills to do this for themselves in the future

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Who should use the Toolkit?

Small to mid-sized companies (up to ~400 employees)

New companies (bake equitable pay into your DNA early!)

Established companies

While Pay equity assessments are typically led by HR or CEO’s office - this toolkit is helpful for ANYONE interested in promoting DEI within their company

includes great resources for framing broader DEI work as well!

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What Is In The LEEP Toolkit?

1) The Pay Equity Playbook

Written by compensation expert, Frank Sadowski

60 pages of step-by-step instruction to independently conduct ongoing pay equity reviews

Templates & resources

2) The Equity Management Tool (EMT)

A big ‘ole excel plug n’ play tool

Populate with your company’s data

Immediately view charts to start assessing your company’s unique pay equity situation on your own timeframe

Assess pay equity by gender, race, disability, veteran status, & more!

The Toolkit has 2 primary pieces:

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Playbook: A Sneak Peak of What’s Inside!

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...And There’s More!

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...And More!

Templates and resources to help you tackle the most critical parts of your assessment, including:

Compensation Philosophy Worksheet

Pay Equity Plan Template

Sadowski Performance Rubric Template (to help link pay to performance)

EMT User Guide: Step-by-step Instructions for Building Great Charts

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Playbook Readers Will Leave With...

...the ability to fish!

knowledge & tools to develop a compensation philosophy
guidance for setting pay ranges
step-by-step instructions for completing a pay equity assessment
An understanding of how to diagnose common issues that may be leading to pay inequities
Strategies to address these common issues
A plethora of knowledge & tools to design a plan to achieve and maintain pay equity for the long-run

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But wait!...what the heck is a COMPA RATIO?

Compa Ratio = current wage or salary

pay range midpoint

expressed as a # or %
A compa ratio of 1 or 100% = pay at the midpoint of the pay range

Example:

$60K

https://docs.google.com/document/d/1Wgoglu0AE8qLzCicSCAgksfphhRGtP-x-SxdNeXsYJU/edit?usp=sharing

We are working with compa ratios, which means we are implicitly assuming that we have pay ranges that make sense relative to the rest of the world and to your comp philosophy. We have already found a few places where we think that may be a faulty assumption, which you need to fix, but looking at compa ratios the way we are is mostly an exercise in looking at internal equity. If you have good pay ranges, they can also be helpful in looking at competitiveness with the rest of the world, but mostly they are useful in helping you evaluate internal equity.

The second thing is simply that I hope you will get curious about why you pay people the way that you do. One of the things our toll will do is help yu tease out what has been influencing your pay. Is it experience in the position, time with the company, time within the industry, or individual performance that leads to people being paid differently. Or is it unconscious bias, historic occupational segregation as a result of men and women being “encouraged” to look at different kinds of careers? It might be several of these possible causes combining over time. There is a logic to pay; it may be “crazy” logic or what we consider to be bad influences on pay, but there is a logic. You won’t be able to fix problems until you can identify them.

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A Look at the Equity Management Tool (EMT)

The Equity Management Tool - EMT for short - was created to help people quickly see where there may be potential pay equity issues in a company. Version 1 was created by Sadowski Consulting Services in 2020. The staff at Gallagher, Flynn & Company worked with us earlier this year to upgrade the tool and make it more user friendly, so now version 2.0 is available with the playbook and the other materials just mentioned. In big companies with lots of employees in each position, the numbers are there to do good statistical comparisons of how men and women are being paid and discover the difference in pay between those two groups if one exists. For small companies where there may be just a few people, or even just one, with the same job title, however, you don’t have the number of people needed to use those statistical tools.

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And Create Your Charts!

You can choose from a variety of variables, creating charts that compare compa ratios across positions and illustrate your current compensation scheme, helping you answer the important question:

Is it in line with your goals, strategies and values?

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A CASE STUDY:

Investigating how employees have been paid in the past

So imagine this situation. A company has been sold, there are new owners, and all of the old senior management is gone so there is no one who can tell you why people are paid the way they are. A new HR Manager is trying to figure out why people are paid what they are paid. Because she found some performance review scores in the file, she thought that there might be some kind of merit pay system that has been driving pay. She starts with a small group of employees - all of the shippers and receivers in the company. In this chart, performance review scores increase as you go from left to right on the chart, and compa ratios increase on the y-axis. So, if pay increases are based on performance, the chart should show a steady increase from the lower left as you are looking at the chart to the upper right. But when the HR Manager creates the chart, that’s not what she gets. You can see that some employees with lower performance review scores are being paid significantly more than some employees with much higher performance review scores. So it doesn’t look like performance is the major driver of pay differences for these two groups.

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by tenure and race:

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by tenure and gender:

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all employees by tenure and gender:

She wonders how extensive this problem is, so she looks at all the employees who reported to this manager, and when does this, she sees that she has a very pervasive pattern. Clearly, this manager was discriminating against woman and non-binary employees. She then continuers her analysis looking at other departments to see if the problem is company-wide or if there are other issues elsewhere in the company. She has used the tool to quickly find out a great deal about how people were actually being paid rather than accepting anyone’s statement of how it was done. She can see the scope of the problem and then figure out how to fix it. In the Playbook, there are many other examples of the kinds of things that you can find using the tool. We hope it will help companies recognize issues before people leave or sue because they feel like they were not treated fairly.

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Appendix

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what’s needed to achieve Pay Equity:

been doing compensation work for many years
increasing focus on pay equity
VT companies have a long history of leading in best practice
a lot has developed in the field for large companies
but not many resources for small companies
yikes!
Frank & Krysta doing pay equity work with companies individually, but saw a need for more standard approaches and tools that copnaines could apply themselves to really accelerate pay equity as a standard business practices for small to medium sized companies
after a few years of conversations with the Change the Story team, lots of good nudging from business leaders like Duane - asking when we would be ready - we finally convened 7 companies for a year long pilot project to
focus on empowering companies with the knowledge, tools, and skills to do this for themselves in the future

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Data needed to launch the EMT:

been doing compensation work for many years
increasing focus on pay equity
VT companies have a long history of leading in best practice
a lot has developed in the field for large companies
but not many resources for small companies
yikes!
Frank & Krysta doing pay equity work with companies individually, but saw a need for more standard approaches and tools that copnaines could apply themselves to really accelerate pay equity as a standard business practices for small to medium sized companies
after a few years of conversations with the Change the Story team, lots of good nudging from business leaders like Duane - asking when we would be ready - we finally convened 7 companies for a year long pilot project to
focus on empowering companies with the knowledge, tools, and skills to do this for themselves in the future

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Program Overview

The cohort will meet monthly for 6 months and then check-in again at 8 and 11 months.

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February (#1)

Program kick-off & Compensation Philosophies

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Homework: Completing Compensation Philosophy

March (#2)

Review Compensation Philosophies, and Intro to Data Collection and the Analysis Tool

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Homework: Collect and input your company data in to the Analysis Tool

April (#3)

Understanding Common Scenarios in the Data

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Homework: Meet 1:1 with consulting team to analyze your company’s data

May (#4)

Deeper Dive into Common Scenarios & Strategies to Address them

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Homework: Continue analyzing your data, identifying any issues, and developing strategies to address your issues. Meet 1:1 with consulting team again

June (#5)

Pay Equity Plan Overview

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Homework: Develop your company’s pay equity plan to address any current issues and then maintain pay equity over time

July (#6)

Pay Equity Plan Presentations – Cohort members will share their plans (or aspects of them) with the group

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Homework: Continue to develop and implement plans

September (#7)

Check-in on progress implementing plans and troubleshoot

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December (#8)

Check-in on progress implementing plans, trouble shoot, and focus on how to keep problems from recurring

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