Page 353 - Discrimination at Work The Psychological and Organizational Bases

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include pay and benefits, and modern total compensation approaches ex­
tend the definition of compensation to include a variety of favorable out­
comes experienced by the employee (Milkovich & Newman, 2002). Be­
cause of the importance of pay to employees, compensation and benefit
programs can serve as a major indicator of possible discrimination in the
organization. However, pay policies can also be used to reduce discrimi­
natory behavior and encourage diversity.
Reducing the Negative Effects of Compensation Practices Although
potential race and age discrimination in compensation is an important con­
cern, most of the applied and research attention has been directed at sex-
related issues, especially comparable worth and pay equity (Blumrosen,
1979; Treiman & Hartman, 1981). Organizations can reduce the negative
effects of their compensation practices by auditing their policies and then,
based on the results of the audits, refine their procedures to eliminate bias,
and where necessary, adjust the pay of minority group members. The type
of audits that organizations can engage in will correspond to the three ma­
jor theories, approaches, or techniques used in defining pay discrimination.
The three major approaches or types of audit are (a) an equal pay audit,
(b) a pay equity audit, and (c) an analysis of across-the-board problems.
Equal Pay Analysis In the first type of audit, an organization should
consider performing an equal pay analysis. According to an equal pay
approach to studying wage discrimination, jobs that involve the same or
highly similar tasks and knowledge, skills, and abilities should be paid the
same regardless of the sex (or race, age, or other protected class status) of
the incumbent. In the United States, this definition of discrimination was
operationalized through the Equal Pay Act of 1963. The provisions of this
Act were also incorporated into the Civil Rights Act of 1964. Although,
today, most organizations appear to be in compliance with equal pay pro­
visions, employers should pay careful attention to policies that may lead
to the appearance of violations of equal pay. Two major potential problem
areas for organizations are (a) paying relatively large differentials for small
differences in jobs, such as paying men substantially more than women be­
cause the job occupied by men involves a lifting component not found on
the female sex-typed job (Milkovich & Newman, 2002; Shultz v. Wheaton
Glass Co., 1970); and, (b) paying large differentials for training programs,
such as paying a man more for performing the job of teller in a bank be­
cause he is considered to be in a managerial training program (Milkovich
& Newman, 2002). An equal pay audit will point to areas of potential dis­
crimination involving individuals. Where examples of unequal pay based
upon sex, race, or other factors, are identified, appropriate adjustments
should be made to the affected employees' salaries.