Salary Inequities Case Study 1

Salary Inequities Case Study

Learning Team E

March 19, 2018

HRM/531
Salary Inequities Case Study 2

(INTRODUCTION HERE)

There is almost no absolute explanation for the difference in pay that female sales

representatives receive compared to male. However, we can mention that female

representatives can sell more products than a man in an easier way. For example,

pharmaceutical companies tend to hire female representatives with attractive looks. They

also lower the hiring requirement for attractive representatives. However, companies will

spend more on training and reduce female representatives salaries, this may be one

method to cover the training costs.

By having compliance review of the OFCCP concluded that Astra Zeneca

violated the Executive order 11246. Failing to ensure certain female employees were paid

fairly. OFCCP lawsuit; Astra Zeneca Business Center had to routinely paid some of its

female’s Primary Care and Specialty. Level III pharmaceutical sales specialists an

average of $1700 less than man with the same positions. However, the company has been

getting away with this for a long time because of the company’s pay secrecy policies,

many women didn’t know they were getting paid less. Astra Zencea and OFCCP will

review records of the firm’s female employees in 14 states, and if they find additional

statistical evidence of wage discrimination the company must remedy it.

The company has a pay secrecy policy, which allows them to hide the truth from

their employees. They don’t have an established pay scale so individuals don’t know how

much they should make therefore, in relation to other individuals they didn’t ask

questions to be treated fairly. The law does not take into account factors such as length of

time in the company as well as trainings. This is caused by either a lack of trust within

the company, or they want to keep employees secrets safe. There can be many reasons
Salary Inequities Case Study 3

why their pay scale is un-established but one main reason could be that they don’t really

have a set one. This is due to years in inequality and the belief that witty woman are not

capable compared to men. The law is looking for equality and without proper records

they can only show what they see.

If you what to make pay and promotions equity and without discrimination,

companies first form a board or committee with equal amounts of men and woman. This

will help eliminate the decisions being made by one male or one female because human

nature dictates that we will always be bias for one reason or another. The second thing to

help is to develop a merit-based platform for pay and promotions, which should be based

on education, knowledge, and performance. The third is to develop a company wide

standard for hiring, salary, and promotion standards for employees to follow to eliminate

doubts and ambiguity.

Astra Zeneca should utilize the internal, external, procedural, and individual

equity when determining the compensation plan for the business. The internal equity will

evaluate the pay of a specific position in comparison to one with similar requirements.

Through the use of the performance appraisals and any other incentive pay that a specific

position may hold this will also assist with the internal equity. The external equity the

company can use to evaluate their pay rate for a position with that of the same position

but held within a different company. Through the use of salary surveys this company

could determine if the pay is considered “fair” in comparison.

Lastly the individual equity can come into play by asking the employees specific

questions about the pay rate, and make a determination based on these specific answers to

make a decision. Overall, for a specific compensation plan Astra Zeneca should utilize
Salary Inequities Case Study 4

the equity factors to make a determination regarding compensation, this will create a

more fair determination of what the pay rate should be. The organization should have a

set salary for positions, and then potentially offer incentive programs to reward the higher

producing employees.

Broad banding pay plan collapse salary grades/classes into wide levels/bands.

Each level/band contains a wide range of jobs and pay levels. Besides having fewer

salary ranges, this structure also has larger midpoint differentials with a lesser degree of

overlap compared to the traditional pay structure. Companies that have an emphasis on

career development use this. Broad banding is imperative for companies with

competency-based pay programs, but also used by companies with longevity and

performance-based pay programs. Companies employ broad banding to: facilitate

change, avoid multiple pay structures, provide greater latitude in management pay

decisions, reduce the need for precise job analysis/evaluation, and promote fewer,

broadly defined jobs.

Comparable worth structure suggests that employers equally pay men and women

whom perform work involving comparable skills and responsibility. That work must

provide comparable worth to the employers. This system is heavily linked to the job

evaluation. This pay structure is built to eliminate sex-segregated jobs. Broad oversight of

executive pay suggests that the board oversees the executive’s pay. This pay system

ensures benefits are accounted for and is linked to financial auditing.

The total rewards system not only includes traditional financial rewards but also

non-financial rewards. The system provides several benefits such as, driving

organizational success through greater talent attraction, engagement and retention,

Salary Inequities Case Study 5

guiding investment decisions for the employer while enabling informed choices for the

employees, clarifying the employer-employee relationship, and build a distinctive

employment brand. Lastly to increase the return on rewards and create value of the

enterprise.

Astra Zeneca utilizes the total rewards pay system. At this company, employees

are paid out based on their experience, seniority, and tenure. For example a sales

representative here earns $82,361 compared to $76,380 of the market’s sales

representatives earnings. One other example, employees with a Bachelors in Science

earns $57,525-$102,285 compared to one that earns $88,200-$142,482 with a Masters of

Science.

(INSERT LESSONS LEARNED HERE)

(CONCLUSION)
Salary Inequities Case Study 6

Reference:

(INSERT REFERENCE FROM COURSE BOOK)