ERIC Number: ED271714
Record Type: RIE
Publication Date: 1986-Aug
Reference Count: 0
Cost Impact of Alternative Comparable Worth Strategies.
Arvey, Richard D.; Holt, Katherine E.
Although the obligation to pay employees according to comparable work value has been made into law in some areas, little has been said about what strategies organizations can use in achieving pay equity. This study attempted to determine the effects of various strategies on overall cost in achieving pay equity. Job evaluation and salary data were obtained from two organizations. Salary data were regressed on job evaluation points for male-dominated, female-dominated, and balanced jobs. Five strategies of comparable worth salary adjustment were costed for each organization, using the male regression line as the adjustment target. These strategies were formulated as follows: (1) use male regression formula to raise only female jobs below the male line up to the line; (2) use male regression formula to raise all jobs up to the male line; (3) give female jobs below the male line a constant amount that would render the sex dummy variable for the male/female regression insignificant; (4) compute the average underpayment and give all female jobs a constant amount; and (5) use male regression formula to estimate salaries for all jobs. The results indicated that the cost burden ranged from $2,257,935 to $4,442,247 in one organization and from $3,506,635 to $7,936,521 in the other. These findings demonstrate that the choice to adopt one pay equity adjustment strategy rather than another has the potential to save organizations millions of dollars. (NB)
Publication Type: Reports - Research; Speeches/Meeting Papers
Education Level: N/A
Authoring Institution: N/A
Note: Paper presented at the Annual Convention of the American Psychological Association (94th, Washington, DC, August 22-26, 1986). Funding for this research provided by the University of Minnesota School of Management.