Pay supplements, benefits, commissions, and bonuses—in many workplaces, compensation consists of so much more than just base pay. For a pay equity analysis to be accurate, these components must also be taken into account. In this article, we’ll explore why this matters—and how Flex HRM Pay Equity Compass helps you get a better grasp of the big picture.
This is part of our blog series on pay equity analysis in practice. In this series, we share practical tips and best practices for those who want to get the most out of Pay Equity Compass—the tool that makes it easy to get everything right when it comes to pay equity analysis and pay transparency. Read the other parts here.
What should be analyzed in a pay equity analysis?
When we talk about pay equity analysis, it’s easy to think first and foremost about base pay. And yes, that’s certainly an important part. But according to the Swedish Discrimination Act, employers must survey and analyze both pay and other terms of employment.
This means that other components of compensation may also need to be included in the analysis, such as benefits, bonus systems, commissions, and other salary supplements. The principle is simple: two people may have roughly the same base salary, but still end up with different total compensation when bonuses, commissions, or other supplements are factored in. If those components are missing from the data, there’s a risk that the analysis will overlook differences that actually affect employees’ compensation.
That said, how do you go about including more components than just base pay in the data set? Let’s take a closer look at that now!
Learn more about Pay Equity Compass.
Custom fields help you capture more pay components
In Pay Equity Compass, you can use the “Custom Fields”feature to capture compensation components that should be included alongside base pay in the pay equity analysis
These might include, for example, commissions, bonuses, salary supplements, benefits, and other numerical compensation components that should be factored into the analysis
Once the data is entered correctly, the system can read it and combine it with the base salary. This gives you a more complete basis for comparison—and better conditions for identifying, understanding, and following up on any pay disparities.
How to include variable compensation in your pay equity analysis
Variable compensation can fluctuate over time. Therefore, you may need to start by calculating an average per employee, such as the average commission over the past twelve months.
Once the values are ready, they need to be entered into Flex HRM and linked to the pay survey. Here’s how to do it:
- Use Custom Fields for compensation that supplements the base salary, such as Commission or Bonus
- Create new custom fields if you don’t have fields that fit your structure.
- Select which fields should be displayed in the salary survey.
- Make sure the field is active when the salary survey is created; otherwise, the value will not be included in the data
- Create a pay supplement in the Pay Compass settings and select which numeric fields should be added to the base salary
Once this is done, Pay Equity Compass can use the data in the pay survey to compare total compensation in a more automated way.
Want to learn more?
Do you use Flex HRM Pay Equity Compass and want to learn more about how to work smart with everything related to pay surveys and pay transparency? Read more in our Knowledge Base.
Haven’t made the switch to Pay Equity Compass yet but are curious to learn more? Contact us, and we’ll show you how!
