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The ‘gender pay gap’ and other demographic differences in compensation is a well-known phenomenon. These gaps are not just unfair and bad for an organization’s reputation, they are also detrimental for retention and employee loyalty. Consider what happens when the new underpaid employee discovers the discrepancy (and they will)? They could tell their peers, they could leave for an organization that treats them more equitably, or they could ask for more money. In the third case, the organization is now in a precarious position – say yes and risk angering longer-standing employees because the new person got a raise and they didn’t. Or say no and they leave or complain then leave. Is your head spinning yet? Luckily, this is avoidable. Establish salary bands per position/rank and be transparent with where the new hire will fall within it and how mobile the bands are (i.e. that there is a path to getting raises). Even better, have established, documented expectations for how employees earn raises – so that all employees have an equal and fair opportunity to excel.

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