Adjusted Difference —How to Account for the Composition of the Groups Being Compared
The adjusted pay gap takes into account selected characteristics of individuals or their jobs. In SmartFP, compensation is compared within combinations of position, seniority, and work schedule. This breakdown helps determine whether the gap persists even among people who are similar in these respects.
What Influences the Outcome
The quality of the classification is important. If one team designates an independent specialist as a senior and another as a junior, they will create categories with the same names but different meanings.
Where the Comparison Ends
In a combination consisting solely of women or solely of men, it is not possible to calculate the difference between the two groups. Therefore, when interpreting the results, pay attention to who the comparison actually represents.
Why the Overall Picture May Vary
In the model company, junior employees earn 200 CZK per hour and senior employees earn 300 CZK. Among the men, there are three senior employees and one junior employee; among the women, there is one senior employee and three junior employees. The averages are 275 and 225 Kč. If everyone has the same position and work schedule, the difference within each seniority level will be zero.
What if the difference disappears after adjustment?
In the example given, the total difference is explained by the distribution across seniority levels. Another question is what criteria determine promotion to a higher level and whether everyone has equal opportunities for advancement.
For an initial company-wide comparison, use the calculation of the total pay gap. When dividing employees into smaller groups, it helps to distinguish between seniority and work schedule.
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How does the result change when seniority is taken into account?
Using the SmartFP demo, we’ll walk through the breakdown by position, seniority, and work schedule, and explain for which groups the comparison is meaningful.
