Ensuring Internal and External Pay Equity

Ensuring Internal and External Pay Equity

  |  April 26, 2018

Many co-ops using policy governance have an Ends policy requiring staff compensation that is both internally and externally equitable. However without diligent attention, pay scales and what individual staff end up making can get out of whack over time. Below are a few tips to keep you in compliance.

Compensation market study. Make sure you are staying up-to-date on what the external market is paying for the jobs in your store. Pay rates for some positions can change rapidly while others stay relatively unchanged. Knowing which positions are likely to be more volatile and needing study will help conserve limited resources.

Hiring rates. Many co-ops unilaterally offer the beginning pay rate for the pay range a new hire is in. For those who negotiate a starting salary based on experience, be sure to review the current pay of others in similar roles to ensure you’re not creating new internal equity problems by negotiating too high or too low for your new hire.

Consistency with raises. Some co-ops have a set raise for everyone, or a set process for deciding a 1-3% raise, for example. If raises are left up to individual managers without any normative standard, you might encourage greater transparency between managers about average pay raises, which can create a norm and more consistency in the future.

Adjust pay as needed. If a compensation market study or internal analysis shows that some staff are being underpaid compared to the market or their peers, be prepared to take steps as needed to remedy the situation. Particularly if pay discrepancies fall along protected class lines (such as gender, race, etc.)

Even without an Ends policy on staff compensation, all co-ops should be taking active steps to ensure their pay scale and current pay rates aren’t discriminatory and are staying current with ever-changing market rates and internal changes.

Grab and Go Solutions is a resource from CDS Consulting Co-op to provide easy to implement solutions to common issues facing food co-ops.
Watch for future releases tackling a wide variety of topics including HR, governance, member engagement, safety, store and growth.

Brought to you by CDS Consulting Co-op human resources consultant:
Sarah Dahl

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