3.6 How do I meet GEI 3?

GEI 3

GEI 3 relates to equal remuneration between men and women in your organisation. 

 

Q3: Develop a formal gender pay equity policy and/or strategy

Question 3 asks if you have a formal policy or strategy on remuneration. To answer yes, you will have a standalone policy or strategy on gender pay equity or include these items in another one, like the overall gender equality policy or strategy.

Gender pay equity is when women and men receive equal pay for work of the same or similar value. In practical terms, a gender pay equity objective means that:

  • women and men doing the same work are paid the same amount
  • women and men doing different work of equal or comparable value are paid the same amount
  • you assess job wages and conditions in a non-discriminatory way
  • your structures and processes do not block female employees’ access to work-based training, promotions or flexible working arrangements.

Organisations that actively address gender pay equity set goals in their remuneration policy, which often includes:

  • an approved course of action 
  • principles about remuneration negotiations, scales and benchmarks
  • details on how they set, structure, review and communicate pay.

Your policy or strategy could also include a high-level plan to attract, retain and develop talent in line with your overall business strategy and shareholder or stakeholder interests. For example, a remuneration policy or strategy can:

  • explain how you allocate parts of total remuneration based on performance 
  • outline how you regularly review employee remuneration to make sure women and men receive comparable pay for equal performance in similar roles
  • specify that you include both women and men, including pregnant women and employees on parental leave, in all pay review processes.

You must tell us if your formal policy or strategy includes any of the gender pay equity goals below. Based on your progress, your goal could be to:

  • use a transparent and rigorous performance assessment process
  • ensure against gender bias in the remuneration review process (such as at the beginning or at salary, out-of-cycle and performance pay reviews)
  • disclose pay scales and salary bands
  • hold managers accountable for pay equity outcomes
  • achieve gender pay equity.

You can also tell us about your other pay equity goals that are not listed here.

Q4: Check your payroll for any gender pay gap

Question 4 asks if and when you have done a remuneration analysis by:

  • comparing female and male salaries to see if and where differences occur
  • analysing your employees’ base salary and total remuneration to identify different gender pay gaps. 

Type of gender pay gap

Details

Equal pay (like-for-like)

Pay gap between women and men doing work of equal or comparable value (comparing job to job at the same performance standard).

For example, comparing two senior engineers in the same organisation.

Department- or organisation-wide

The difference between the average remunerations of women and men across the whole department or organisation.

To analyse your payroll, you need data showing:

  • gender
  • salary, including base salary and parts of total remuneration
  • items to help you calculate full-time equivalent employee numbers, such as actual hours employees work and usual full-time contract hours for each position
  • items to help you calculate annual full-time equivalent remuneration, such as base salary, allowances, higher duties, superannuation, bonuses and job title or classification.

You can also collect relevant data on geography, performance rating and tenure. By analysing:

  • how these affect pay, you can determine if a pay gap relates to gender or other factors
  • performance ratings by gender and employment status, you can check for any gender bias before making remuneration or promotion decisions.

Many employers believe that because an award or enterprise bargaining agreement sets their employees’ wages, they do not have to do a payroll analysis. But pay gaps can happen even when pay is set this way.

Question 4 lets you select the following options if you have not conducted a remuneration analysis:

  • No – awards or industrial agreements set salaries for all employees, including managers, and there is no room for discretion in pay changes. Pay only increases when tenure or qualifications change.
  • No – awards or industrial agreements set salaries for some or all employees, including managers. But there is room for discretion in pay changes, because pay can increase with some discretion, such as with performance assessments.

To determine if these options are relevant, see the briefing note on our website outlining the key pay equity issues you should consider if you have a large number of employees on awards or enterprise agreements.

Including remuneration data in your workplace profile does not mean you have checked for a gender pay gap. To answer yes to question 4, you need to follow the checklist below.

Gender pay gap analysis checklist

  1. Collect relevant payroll data 
  2. Analyse data by gender and other factors
  3. Identify any gender pay gaps 
  4. Identify causes of any gaps and if you can explain or justify them
  5. Analyse these causes 
  6. Analyse further if needed

You can provide more details on the type of gender pay gap analysis that you have done, for example like-for-like or organisation-wide, in question 4.01, but this is optional. But the more detailed your analysis, the better you can tailor an action plan to address any issues and their causes.

Q4.1: Act on any gender pay gap

Question 4.1 focuses on how you can act on the results of your remuneration analysis. 

Action

Details

Identify what causes the gaps

Investigate the causes of any gender pay gaps you find.

Develop a pay equity strategy or action plan

Develop specific goals relating to gender pay gap processes and results. Prioritise gaps to address, actions to take, timelines and key accountabilities.

Conduct a gender-based job evaluation

Create a fair and transparent process to evaluate skill, responsibility, demands and conditions. Audit that process to make sure a transparent pay structure is in place.

Analyse starting salaries by gender

Make sure all employees in like-for-like roles start at the same pay by creating a process to review pay decisions for gender bias during recruitment.

Review remuneration decision-making processes

Review:

  • your practices for choosing the level of performance pay and allowances
  • your processes for above-base starting salaries
  • the impact of these on part-time or part-year employees’ remuneration.

Analyse performance pay

Hold meetings to make sure:

  • all divisions make pay decisions consistently
  • there is no gender bias, including unconscious bias.

Report pay equity metrics

Include pay equity metrics in an annual report or on your website for:

  • the governing body
  • the executive
  • all employees
  • external parties.

Depending on how you track performance, we suggest that your board:

  • adopts KPIs related to the causes and results of pay equity
  • reports transparently against these.

Analyse performance ratings

Make sure all divisions apply the performance rating system consistently, and hold meetings on the issue if needed. Review the distribution of performance ratings by gender at all levels and between equal or comparable roles to check for a bias, including unconscious bias.

Train managers to address gender bias

Train managers to do evidence-based performance appraisals without gender bias. Develop a cultural change program in line with your gender equality strategy to reduce gender bias and stereotyping.

Correct like-for-like gaps

Reduce gender pay gaps immediately by allocating a discretionary budget to adjust salaries during the pay review process.

Enact other changes

Write in any other actions you have taken to address gender pay equity.

Discovering gender pay gaps in your organisation does not necessarily mean that you are discriminating. But it does mean you need to analyse the gaps and their reasons to see if you can explain and justify them. 

Many factors affect pay, including:

  • market rates
  • geography
  • performance
  • experience
  • tenure
  • education.

If these factors do not explain the gap, discrimination might be the cause. 

Even if you can attribute a gap to these factors, you still have to ask if it is justifiable. Explaining why gender pay gaps occur is often easier than justifying them. If you cannot justify a gender pay gap by showing, for example, the history of women’s and men’s individual performances in a role, you should fix it.

Question 4.1 lets you select different no options, including ‘no unexplainable or unjustifiable gaps identified’. You can also provide more information about GEI 3 in question 4.2, but this is optional.