Diversity pay ratio
It measures the ratio of the average basic/variable pay pay between diverse groups, ex: male vs. female.
Calculation steps:
- correlate each employee with their basic salary
- divide employees into diversity groups (gender, age, ethnicity)
- average values for each diversity group and category
- divide average basic salary amount for each category to the average amount for the category
Example:
Let's assume that we want to calculate the diversity pay ratio by gender.
Group average pay: 15,000
Gender average pay:
- male: 15,500
- female: 13,000
Diversity pay ratio female = (13,000 / 15,000) x 100 = 87%
On average women are paid salaries lower with 13% than men salaries.
We recommend to calculate this metric for each level in company.
Relevant dimensions: department, performance, key jobs/people, tenure.
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