Compensation Analysis

Compensation Analysis

A full spectrum of compensation analysis services to support federal contractors during OFCCP Compliance Evaluations or to assist with the implementation of Agency Voluntary Guidelines.

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Focusing on Compensation

Increased scrutiny by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has involved efforts to determine whether systemic discrimination exists in Federal Contractor pay practices with regard to females and minorities, as compared to males and non-minorities. OFCCP’s compliance evaluations include a request for compensation information. Paragraph 11, of the Itemized Listing, requests that compensation data be submitted in a summary format. Contractors have a choice as to how this data is submitted. In addition, OFCCP has issued Voluntary Guidelines on conducting systemic compensation discrimination analyses for federal contractors in advance of compliance evaluations.

Because pay and other compensation can be analyzed in many ways, Gerstco offers a full spectrum of compensation analysis services to support federal contractors during OFCCP Compliance Evaluations or to assist with the implementation of Agency Voluntary Guidelines.

How We Analyze Pay

A full catalog of statistical tests to assist in achieving equitable pay.

Pay Discrepancy

The Pay Discrepancy by Job Title report examines each Job Title and displays those job titles where there are pay discrepancies between females and males or between minorities and non-minorities. Where there are differences in annual pay, the actual pay difference and the percentage differences are shown. The level of pay differences can be easily reviewed for each Job Title. High percentage pay differences may indicate the need to perform more detailed analyses.

Compensation Flags

The Compensation Flags or “Tipping” Report examines the annualized pay for females and minorities as compared to males and non-minorities by Pay Grade, Job Title, or Job Group. It compares the mean pay of females to males or minorities to non-minorities and computes the number of employees affected by differences in pay within a selected group.

Statistical Significance

The Mean and Median Statistical Significance Analyses compare the annual compensation of employees in a particular location. The mean (average) or median pay for females and minorities analyzed by Pay Grade or Job Title can be examined to determine by how many standard deviations they differ from the mean pay of males and non-minorities.

Cohort Analysis

The cohort analysis is an individualized look at compensation for similarly situated employees to determine if there are legitimate reasons for disparities in pay. In addition to looking at general factors which influence pay (time with the company, time in a particular job, department, or pay grade, performance ratings, relative experience level, educational attainment, etc), this analysis also considers how, when, and why pay decisions were made to determine if they were made on a consistent, fair and non-discriminatory basis.

Multiple Regression

Affirmative Action Plan information can also be analyzed company-wide, by AAP location, or other employee groupings under attorney-client privilege using multiple regression methodology. This type of analysis evaluates the degree to which selected employee attributes (i.e., performance, time in grade, time in position, company seniority, etc.) are correlated to pay and the extent to which race, gender, or ethnicity may be a factor in compensation. Appropriate reports and charts accompany delivery of this analysis to company personnel.

Pay Remedy

An optional Pay Remedy analysis can accompany the Statistical Significance or Regression analyses. Pay adjustments are calculated for each affected employee in order to eliminate statistically significant pay discrepancies. The applied remedy can be adjusted from the significance threshold all the way to “make whole”.

Custom Pay Equity Analyses

As equal pay for women gains nation-wide attention, a critical examination of pay equity can be a vital step for any organization aiming to close this gap. Customized analyses can determine relative pay percentages for women and men in similar jobs.