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Diversity pay ratio


It measures the ratio of the average basic/variable pay pay between diverse groups, ex: male vs. female.



Calculation steps:

  1. correlate each employee with their basic salary
  2. divide employees into diversity groups (gender, age, ethnicity)
  3. average values for each diversity group and category
  4. 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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