Fair Compensation Research
Team A
Patricia Hailey, Cynthia Whitelow, Jim Loncar
RES/351
March 22, 2014
Darron Williams

Introduction and Problem Statement
ABC Company is currently involved in litigation involving a current female employee’s complaint that the company unfairly administers its wage and salary policies between male and female employees performing the same job. The goal of the research is to determine if ABC Company policies are current, ethical, fair, legal, and administered properly throughout the organization. Our hypothesis is that the wage and salary policies of ABC Company are administered ethically and legally across all units of the company.

Is there pay equity and discrimination among women and men in the workplace?
Congress passed anti-discrimination legislation including the equal pay Act of 1963. Women are still struggling for equal pay in the workplace. According to the Labor Department data show that for 35 to 44 year olds, the earnings ratio of women and men rose from 58 percent in 1979 to 77 percent in 2006 (Labor Department 2006). After researching, the Institute for Women’s Policy Research 2014, states the change in wages for women equal pay is a slow process and it will take nearly fifty years for women to reach the pay as men. The Institute for Women Policy also express that women earn less than men in almost any occupation (Institute for Women’s Policy Research 2014).
“A significant wage gap is still with us, and the gap constitutes nothing less than an ongoing assault on women’s economic freedom,” declared U.S. Rep. Rosa L. DeLauro, D-Conn. (Thomas J. Billitteri, 2008, pg.243) As we look at Wal-Mart one of the largest retail giant that was sued for sex discrimination filed by Betty Dukes, and other female Wal-Mart employees for pay, promotions, and job assignments in violation of the Civil Rights Act of 1964. The case, covering perhaps 1.6 million current and former Wal-Mart employees, is the biggest class action lawsuit against a private employer in United States history. Gender Pay Gap,
(CQ Researcher (2008: Vol. 18, pg.241-264). Lilly Ledbetter case was similar as she described her 19 years she worked at Goodyear tire plant in Gadsden, Alabama one of a handful of women among 80 people who held supervisory position, and the company’s pay raise created a growing gap between her wages and male colleagues over the years (Thomas J. Billitteri, 2008,pg. 243).

Research Design
Exploratory research is an appropriate plan to use in the research of fair compensation within the ABC Company. The company has been sued because of allegations of unfair wages for women who perform the same jobs as the male coworkers. The true problem facing the company must be established to reach an effective decision. Exploratory research will increase management knowledge of the subject of fair compensation between men and women. The use of flexible sources can help with information to establish an appropriate solution (Jackson, C. 2014). Exploratory research will reveal potential variables that may have been overlooked. Although the problem involves fair compensation between women and men, the use of descriptive research will not be the primary source for gathering information. Descriptive research involves describing the characteristic of individuals associated with an issue or situation (Cooper, D., & Schindler, P., 2011). Although there may be a correlation between the reason women are not paid a fair wage and the management decision to properly evaluate an employee, casual studies may not provide the needed information to establish an effective solution to the problem.
To become better educated with the fair compensation within different organizations the qualitative method will be used. The market data collected can be used to research fair compensation to determine the rate pay for a specified job; companies can "benchmark" jobs against compensation study that are specific to the companies' industries and regions. A good compensation study is based on the standard of data collection, statistical analysis, and proven methods to determine how much companies will pay for a specific work in a specific industry. Many types of companies conduct a salary study, for example, industry, educational institutions, and federal and state governments. More than 80 percent of human resources professionals and business managers participate in or purchase at least one study a year. (Business Salary 2014, Compensation surveys and fair pay). Conducting a salary survey can be time consuming, and could take up to 7 months or more after all the data, and questionnaires have been collected. (Business Salary 2014, Compensation surveys and fair pay). The collection of the data for ABC Company will involve various instruments. The first will be existing wage and salary surveys that may be available to the research team. These could include government surveys or business surveys. However, since ABC Company's wage and salary policies and the administration of these policies are under scrutiny due to the pending lawsuit; various other data collection instruments will be used to present data to ABC Company's management.
The research team will use a prepared study with a cross-section of the company's employee population. The employees involved in the survey will be asked the same questions. This will be a rated scale survey.
Another instrument that will be effective is a study of human resource professionals of area organizations is interviews. These interviews will be conducted either in person or via telephone. The researchers will use a prepared question list for these interviews.
The data collection instruments to be used will give a solid base of data for the ABC Company management team to make an informed decision regarding the company's wage and salary policies.
Data Collection The appropriate sampling method to be used in the research is purposive sampling. The participants will be chosen based on their experiences in particular jobs within the company. The sampling frame used in the research will consist of the employees who perform the jobs in the departments. Participants will be selected based on the jobs performed by male and female workers in the departments. Each participant will have a choice as to whether they are willing to participate in the study. Interviews will be performed via phone and face to face to gather information regarding participant’s time on the job, their ability to perform the job, and the use of employee evaluations to justify wages and salaries. In addition to the employee, department managers will also participate in the study. The managers will be asked to complete employee job evaluation forms in which each employee will be rated on their job performance. This information will be helpful in the evaluation of each employee in the determination of compensation. The managers will also participate in interviews regarding compensation for employees. The information gathered will help in determining the number of female employees who perform the same jobs as male participants but with less pay within an organization. Conducting structured interviews will yield information regarding the appropriate use of employee evaluations and the enforcing of policies and procedures in relation to fair compensation for female employees who perform the same tasks as their male co-workers.
Sampling
The ABC Company has to decide on a sampling size that is appropriate for their company. Sampling size should be as large as possible. Without an appropriate sample size data may not be creditable, and the conclusion may be bases on inaccuracy. First, the company will determine the population and the surrounding area which will require knowing the characteristics of the variable interest this will require the calculation sampling size. There are several different sampling sizes for the company to choose from such as; random sampling, precision sampling, confidence intervals standard error, and many more. It is important to pick the right sampling because it can become very expensive for the company.
Variables to Consider
Wage and salary policies and procedures, employee evaluations, promotion policies, and management styles are all variables that must be considered in regards to fair compensation. In an effort to develop a solution to the issue of fair compensation the company must evaluate the wage and salary policy to insure that it is in compliance with the Fair Labor Standards Act of 1938 and the Equal Pay Act of 1963. In establishing fair wages or salaries, internal and external equity must be considered. Internal equity means the employees are paid fairly in comparison to other coworkers and external equity means employees are paid fairly compared to similar jobs in other geographical areas. Communicating the compensation policy to employees is important. Although the company may have a fair compensation policy, it is important that the employees understand the details of the policy and the requirements for increases and other compensation benefits and incentives. Whether to pay an employee a wage or a salary is often determined by the classification of the job. Administrative employees may receive an annual salary whereas employees in the production area may receive hourly wages. Fair compensation should reflect the labor performed by the employee. The use of performance charts and employee evaluations are useful in the establishment of compensation and benefit packages for employees. It is important for management to evaluate employees fairly in regards to skills performed and knowledge of the job. When employees are a contributing factor to the productivity of the company they should be rewarded for their efforts. Jobs performed by female employees should not be overlooked for jobs performed by male employees when it comes to pay raises and bonuses. Promoting employees within the company insures that qualified personnel are placed in positions that benefit the company and the goals they strive to achieve. This practice gives employees who have knowledge of the activities of the company the opportunity to hold positions that would have otherwise been filled by personnel with no experience in the operations of the company. Evaluating the wage and salary policies is one step in combating the issue of fair compensation. Employers should consider fair evaluations and employee skills and knowledge in an effort to properly compensate employees for the work being performed.
Ethical Considerations Many employers develop an attitude of legality. In other words, their mindset is that if it is legal to do it than it is okay to do it. In our information rich society, this is a dangerous game for companies to play where fair compensation and administration of wage and salary policies is considered. For example, employees John and Mary are hired on the same day for the same position, quality inspector for ABC Company. The pay range for this position is $20,000 to $28,000 annually. John is hired with a salary of $26,000 while Mary is hired with a salary of $20,000 annually. These employees perform the same job and have identical job descriptions, but there is a difference of $6,000 in their pay. Is this legal? The company would argue that the disparity of wages between these employees is a matter of differences in education, knowledge, and experience. However, the company must determine whether hiring managers are interpreting these items fairly for all employees. The ethical consideration in this case is that just because an action appears to be legal does not automatically qualify for the action to be ethical or fair. “The fairness of pay, after all, is a moral and ethical issue that stands out within all the various levels of organization, society, economics, politics, methods and procedures, i.e. it reflects the level of civilized attitudes and manners of the main culture (society with all its prevailing systems) and the sub-culture (organizations) as both the system and the people within it” (Muhammad Ali EL-Hajji, 2011).
Summary
The research methods used include: * Interviews with Human Resource professionals of area businesses using a prepared questionnaire that would provide comparative information regarding company wage policies. Interviews would be conducted by face to face or phone. * A ranking scale survey of the employee population of ABC Company that asked employees specific questions regarding their personal evaluation of the company’s wage and salary policies. Questions would require more than a yes or no answer. * Statistical survey data available from government sources or industry surveys.
The research team collected and prepared the data to present to the management of ABC Company. The company is responsible for evaluating the data and for making any decision regarding the company’s current policies. It should also be noted that this is a legal issue and highly confidential for the plaintiff and the defendant. The research was not conducted with any predetermined goal.

References
Cooper, D., & Schindler, P. (2011).Business research methods (11th ed.). New York, NY: McGraw-Hill/Irwin.

CQ Researcher, March 14, 2008. Volume 18, number 11pg241-64 www.cqrearcher.com http://www.iwpr.org/initatives/pay Employee compensation. Encyclopedia of Business, 2nd ed. Retrieved from www.referenceforbusiness.com/small/Di-Eq/Employee-Compensation.html

International Business Machines Corporation(2014) http://business.salary.com/compensation- surveys-and-fair-pay/ Retrieved March, 2014

Jackson, C. (n.d.). The advantages of exploratory research design. Retrieved March, 2014 from www.ehow.com/info_8525088_advantages-exploratory-research-design.html

Muhammad Ali EL-Hajji, P. (2011). Wage Consistency in the Context of Job Evaluation: An Analytical View. International Journal of Business and Social Science, 31-37.

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