One way that Human Resources adds value to an organization is by ensuring that their compensation practices are competitive, fair, and compliant. A tool that helps companies align their pay strategies is called a compensation analysis.  

A compensation analysis plays a key role for companies across all industries and sizes in attracting, motivating, and retaining talent. 

Attracting and retaining top talent is more challenging than ever, and that trend is expected to continue. A competitive and well-thought-out compensation structure can make or break the delicate process of hiring and keeping your best employees. It’s not simply a list of pay scales, but a strategic framework on how employees are compensated that helps promote fairness, competitiveness, and compliance.  

Former head football coach of the Miami Dolphins Brian Flores recently made headlines when he filed a class-action lawsuit against the National Football League and three NFL teams. Part of the lawsuit claims racial discrimination against Flores when he was a candidate for head coaching positions around the league and centers around the “Rooney Rule”.

If you have ever looked closely at the Disparity Analysis section in your AAP, you will see numbers concerning standard deviations that are assigned to selection rates of applicants, promotions, and terminations, but what do these standard deviation numbers actually mean?

How do I determine if pay differences are significant or not?