Pay Equity: How much does your colleague make?

One of the mysteries in corporate America is the pay between associates. Does the person in the cube across from you make more or less for doing the same job? What goes into figuring each person's pay? This practice is more art than science. Companies are bound by the rules of the market and their financials.

So how does a person know if she's getting paid well for her job and her background? The best way to do it is to ask. Many companies have policies against sharing compensation information between employees because they don't want people to complain if they're paid less than a colleague. Discrimination suits are brought from this type of discovery. The reality is, however, that people have the right to know if they're underpaid. Asking a few colleagues to get a sense of where one stands can give that employee motivation to improve performance, or more power in negotiation during performance reviews. The employee, however, has to ask the right person.

Blurring the picture, however, is background. Education attainment plays a large factor in initial compensation packages. For example, a pharmaceutical sales representative may have three years experience with high performance, but still get paid less than a newly hired MBA performing the same position. Is this fair? No, but it is reality.

A more "fair" analysis, however, would be comparing pay levels of people who have the same or similar educational backgrounds and work experience. Each employee would then have a better portrait of standing. In other words, the question of pay equity isn't about how much the person in the next cube makes; it is how much does someone who's just like me make? That's the apples to apples comparison that can provide the negotiation power or provide the right motivation for performance improvement.

So when you're daydreaming in your cube wondering about how much the person over the wall makes, start by asking her about her educational background and work experience. It's obviously a more comfortable opening. Then when you find the person who's most like you, have an open dialogue about pay. This is the kind of hard work that always pays off.