How Your Company Calculates Pay Equity Adjustments

Episode 21 of The Compensation Podcast examines the mechanics of pay equity adjustments, focusing on how companies determine whose pay gets raised, by how much, and why the process is far from objective. Lucas and Luna break down a real-world example from a mid-size tech firm that conducted a pay audit in Q1 2026, uncovering a 7% gap between median male and female compensation in its engineering division. They walk through the four steps companies typically follow: selecting a comparator group, choosing a statistical model (often a regression), identifying outliers, and deciding whether to raise everyone to the median or only those flagged as outliers. The episode highlights a controversial choice: whether to adjust base salary, bonus targets, or both, and how that decision can create new inequities. By the end, listeners will understand why two similar companies auditing similar gaps can arrive at radically different adjustment budgets, and how to read their own employer's equity report with a more critical eye. #PayEquity #SalaryAdjustments #CompensationAudit #GenderPayGap #RegressionAnalysis #JobEvaluation #BaseSalary #BonusTargets #MedianVsAverage #OutlierAdjustment #EqualPayAct #OFCCP #TechIndustry #HRMetrics #PeopleAnalytics #Careers #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo