Global Compensation Strategy

Pay equity analysis requires two distinct analytical steps that are often confused: the first is a raw gap analysis showing overall differences in pay by demographic group, and the second is a controlled gap analysis that statistically adjusts for legitimate pay factors like role, level, location, and experience — revealing whether gaps remain after these factors are accounted for. The controlled gap is the measure of actual pay inequity; the raw gap reflects both inequity and the effects of historical underrepresentation in higher-paying roles. Both matter, but they require different interventions: controlled gaps require compensation correction, while raw gaps require advancement and hiring equity programs. Organizations that analyze only the raw gap misdiagnose the problem and implement the wrong solutions.