I once dealt with a case where two employees performed similar roles but had noticeably different compensation. Explaining that difference without damaging morale was incredibly difficult. Equity conversations are never just about numbers.
How do you address pay gaps without losing trust?

likefunny
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I'm not sure you can. Once that employee learned they were clearly being underpaid, all bets were off. The company should have fixed that error. You can't explain away a pay gap like that.

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Indeed it is.

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If someone questions their compensation just give an honest answer. It usually has to do with their experience, when they came into the company, and even how good a negotiator they were when they arrived. If they're upset because someone else is paid more that's really not a good conversation to entertain. Each case is unique, and companies aren't required to make everyone's pay the same.

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True

Many times this is the result of a large gap in the years the employees have been at the company. If a person has been with a company 20 years their pay may not have caught up to the market so that when a new person in the same position comes in new, they may be making the same or more. Now the company should address the pay compression when that happens but they don't always do that. If they are keeping up with compensation they will adjust the pay of the tenured employee to be comparable.

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This is also very true.

I've seen this for the past 20 years. Since then, female co-workers with less experience and lower performance levels consistently enjoy higher pay than myself. Unfortunately, this is not only a common occurrence, federal law mandates the practice of pay raises to level women up to the salary of their highest paid male co-worker. Most of the time their pay is set to exceed that of the man to ensure the company is operating safely.

You mention that they had similar roles, so this means that they were not the same. This means that there is the scope to pay them differently.

If you hire an Analyst for 80,000 another Analyst could already be on 110,000. It depends what they are analysing! Is one of them a specialist in a niche field and one of 6 experts in the world? Is one hired into a team making a lot of profit or tied to sales, and the other analyst tied to a role that is not bringing in money to the business or profitable?

There are sometimes different contexts to the same job title, which means that not everyone is on the same salary.

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