HR directors back audits to spotlight inequalities

Two HR directors who sat on the
Equal Pay Task Force have told Personnel Today that regular mandatory equal pay
audits are essential if the 18 per cent gender pay gap is to be significantly

Juris Grinbergs, HR director of Littlewoods,
explained that many employers were complacent about conducting pay reviews. He
pointed to an NOP survey in January 2001 that showed that only a third of
employers conduct pay reviews.

Regular pay reviews are essential
for picking up pay inequalities, he said.  

But the CIPD and CBI have called
for a voluntary approach to pay reviews and criticised the task force’s
recommendations. They believe it will result in more red tape for employers.  

Bob Mason, senior vice president of
HR at BT Wireless who chaired the task force, told Personnel Today, “I reject
the CBI’s sweeping dismissal of the recommendations. Given more careful reading
of the report, I think that the CBI would find much in our recommendations,
which they would support and encourage.”

He explained that mandatory pay
reviews wouldn’t be a burden because large and medium sized employers have
payroll systems in place that can generate the data. Furthermore, companies
will only have to conduct a full pay review if discrepancies are highlighted by
an initial health check of the company’s pay structures.

Mason said, “I don’t accept the
view that this is difficult.”

Grinbergs is calling for the Equal
Pay Act to be amended as soon as possible, and was disappointed by the CIPD’s
lack of support.

He said, “They focused on one line
only. We called for other recommendations in the report such as the EOC helping
to raise employers’ awareness of equal pay issues and increasing the
effectiveness of employment tribunal procedures.”

The Government remains sceptical
about implementing mandatory pay reviews, with employment minister Tessa Jowell
refusing to commit to the recommendations at the task force announcement.

But Grinbergs is pushing for change
by next year. He said, “The legislative timetables are up in the air due to the
General Election so it’s unlikely that the law will be changed until March or
April 2002.”

How the task force plans to tackle
the pay gap

– Raising levels of awareness among
employers, which involves promotion by the EOC and representative bodies such
as the CBI and CIPD

– Improving equal pay legislation,
introducing a requirement for employers to conduct pay reviews and streamlining
tribunal processes

– Improving pay review guidance for
employers and unions

– Reporting equal pay reviews in
employers’ annual reports

– Creating a statutory duty on
public employers to promote equal pay

– Encouraging the Government to
assess how policies such as the National Minimum Wage, the National Childcare
Strategy and National Skills Agenda could narrow the pay gap

How audits will work

The Equal Pay Task Force recommends
a two-stage approach to mandatory equal pay reviews.

Stage one is an assessment of the
pay both sexes in an organisation receive to establish if there are pay
inequalities. If there are, then stage two will examine the nature, causes and
extent of the inequalities.

All companies have to complete
stage one, unless they can show they have completed a full pay system review in
line with the EOC Code of Practice.

Stage one includes a pay system
equality check, to enable employers to assess whether they have a gender pay
gap. Employers have to answer a number of questions on their equal pay policies.

The complexity of a full stage two
equal pay review depends on the organisation’s pay systems and availability of
data on men and women’s pay. Determining where men and women perform equally at
work will be crucial to this stage.

The diversity of approaches to pay
determination among employers makes one simple approach to the more detailed
stage two review impossible.

The Equal Pay Task Force has
produced broad guidelines on the key features of this stage.

Once stage two has been completed
employers should know the nature and extent of pay gaps within their
organisations. An action plan is required to eliminate instances of pay
discrimination and provide equal pay within a reasonable timescale.

The task force recommends that an
action plan should provide equal pay within a maximum of three years. Key
figures of the action plan are that it:

– Is agreed with recognised trade

– Introduces an equal pay policy,
if none exists

– Changes the processes, rules or
practices of unequal pay

– Gives equal pay to current and future
employees. If a transitional period is required this should be less than three
years in all but the most complex situations

– Sets up a system of regular
monitoring and clear managerial accountability to ensure the pay system is free
from sex bias

Feedback from the profession

A recent CIPD survey suggested that
there is a 17 per cent pay gap between male and female HR directors. Personnel
Today asked six female HR professionals why

Francesca Okosi,
director of human resources, London Borough of Brent

“Women HR directors are
underpaid. It is wrong and needs to be changed but it will be difficult due to
the social conditions affecting this. I believe women’s salaries are less
because they may take career breaks because of pregnancy. So when they come back
they almost have to start again and their experience is undervalued.”

Beverley Shears, HR director,
SouthWest Trains

“Men may well get paid
more because they have career plans. Unfortunately, I do not think women have
the confidence in themselves to handle high-profile jobs, which needs to be
addressed if the pay gap is to be reduced. The proportion of women in HR and
women in high-level positions within HR is disproportionate. If we are able to
change this it could help to redress the balance.”

Elly Waldron, HR
“I find it hard to
believe that companies are able to get away with a gender pay gap at the top in
HR. A female director is going to be intelligent, and a female HR
director is going to know her employment rights, so I am surprised by the
findings. I assume women HR directors do not want to rock the boat”

Fiona Colquhoun, HR
director, ICL

“I’m not sure I agree
that women HR directors are paid less than their male counterparts. The issue
of gender pay is hard to judge. Companies base pay on ability and what they
believe the individual is worth. It is often the case that a new person taking
a job will get paid more than the previous person, that is the way of the

Carmen Burton, HR executive manager
of accountants, Norton practice
“The results do
not surprise me, as there seems to be two different directions to reach the top
in HR. Women traditionally start off at the bottom and work their way up, while
senior HR men tend to have no or little HR background and often come from other
business areas. This is one of the reasons for the gap in salaries.”

Hilary Campbell, HR
director of call centre outsourcing, Vertex
 “I do not believe there is pay gap at
director level in HR between the genders. We (women) are too ready to shout
“foul”. Until the number of women at senior level in HR increases it is
impossible to compare salaries – it’s like comparing apples with pears.”

Case study: BT shows how it should
be done

BT introduced changes in 1998 to
its pay review processes of management grades after a number of pay audits
revealed a gender pay gap in the company.

The changes to its pay review
system included an equal pay statement and a specific budget for equal pay

Bob Mason, senior vice-president of
HR at BT, said pay reviews are conducted after the pay rounds.

During the pay rounds the HR
department issues guidance to managers reminding them of equal pay policies.
Each business then undertakes a pay review to see if there are any
discrepancies in pay.

Where differences are identified,
each business unit has a specific budget to assist in redressing the balance.  

Mason explained that BT has set
aside money specifically to address any equal pay anomalies.

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