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Comparable Worth

In: Business and Management

Submitted By mrgorrilla
Words 724
Pages 3
Introduction:
The debate in this study is that of whether or not to use comparable worth as the basis for future pay adjustments. Comparable worth, as defined by Merriam-Webster, is the concept that women and men should receive equal pay for jobs calling for comparable skill and responsibility or that is of comparable worth to the employer. To further expand on this, the term comparable worth describes the idea that gender biased jobs should be reanalyzed to determine their worth to an employer. In theory, the goal of comparable worth is to raise wages for traditionally female-biased jobs to the level of those for comparable male-biased jobs. Comparable worth should not be confused with equal pay for equal work. Comparable worth policies promote equal pay for comparable work.
Facts:
There has been a growing effort in the past few years to level the playing field with respect to pay in comparable jobs. As outlined previously there is a stark difference between comparable jobs and equal jobs. There is already a set of laws on the books ensuring that women are to be compensated as a man in the equal jobs. Comparisons can not be made between individuals holding the same job at different companies(1). This set of laws in called the Equality Pay Act of 1963(1). There is however, no such law stating that men and women should be compensated as to the terms of the concept of comparable worth.
Under comparable worth, jobs would be rated, and points would be assigned according to characteristics such as necessary knowledge and skills, mental demands, accountability, and working conditions. Jobs scoring the same would then be paid the same, regardless of the pay differentials that might prevail in the market.
The evaluation procedure may appear objective, but it in fact is highly subjective. Although it makes sense for job attributes such as skills and working conditions to influence pay, there is no one correct method for determining the number of points to be assigned to each attribute, or for determining the weight each attribute should have in the overall worth of each job. Therefore, different job evaluation systems and different job evaluators are likely to assign different rankings to the same set of occupations.
Recommendations:
After careful consideration of the relevant facts of this case, my recommendation would be to deny the request of future wage adjustments based upon comparable worth. This recommendation is being made in light of several key factors. The first factor is that under comparable worth, employers would be required to set wages to reflect differences in the worth of jobs, with worth largely determined by job evaluation studies, not by market forces. This sounds good in theory, however, it will put the organization at a distinct disadvantage. According to Ann Barres, “The size of a worker’s paycheck would be unrelated to supply/demand conditions in the labor market.” Therefore comparative worth could artificially inflate wages in some jobs and thereby attracting more people than the market could absorb. Any radical restructuring of pay scales would place an unfair burden on employers by raising their costs, and would unfairly impinge upon their freedom to earn their livelihood as they choose(2). On the other hand if there was a shortage of workers in one job, the employers hands would be tied as they could not raise the wages as to attract more applicants.
The next issue is that of determining comparative worth. Given the large number and diversity of jobs being rated, it is unlikely that any two people could come up with an identical valuation . This is not only because people disagree about the facts, but because the whole notion of assigning an objective valuation on labor is absurd. Like beauty, value is in the eyes of the beholder. The value of a person's work depends not on how socially necessary it is or how many points it is awarded by a board, but on the willingness of consumers and thus employers to pay for it. In the final analysis, the comparable worth doctrine means job evaluators would simply replace the consensus of the market's subjective assessments with their own subjective assessment.
Sources:
1. Ivancevich, J. & Konopaske, R. (2013). Human Resource Management. New York, Mcgraw Hill 2. http://www.worldatwork.org/waw/adimComment?id=38793

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