Business Resources: Developing an Equitable Payscale

Business Resources: Developing an Equitable Payscale

Co-written by Althea Baird (bookkeeper, activist) and Talia Young (Executive Director, Fishadelphia) 

Fishadelphia’s bookkeeper, Althea Baird, consults with organizations to help them develop equitable payscale systems.  Althea outlines a 5-step process: 

  1. Decide who is going to be in charge of and involved with this decision-making process.  (See blog post on decision-making frameworks.)  

    1. Is everyone at the organization going to be involved?  Just some people?  Then proceed with the following steps with the decision-makers.  

  2. Decide on guardrails.  

    1. What are some limitations we agree on as a group, that will apply to everyone's wages? Some examples:

      1. Living wage: No one is paid less than a living wage.  (Side question: how do we calculate a living wage?  One living wage calculator is here: https://livingwage.mit.edu/). 

  1. Wage gap: Highest paid will make no more than x times the wage of the lowest paid. 

  2. Budget limit: We will not spend more than x per month on wages

  3. Do we think it is important for there to be wage differences between employees?  

  1. Create tiers.

    1. If we decide that it is important for there to be wage differences, we have to create wage tiers.  How many categories do we want there to be?  Some examples: 

      1. Workers / managers

      2. Trial employees / full employees

      3. Admin staff / program staff / manual labor?

    2. Is it possible to move from one category to another?  If so, how does that happen?

      1. Performance?

      2. Level of responsibility?

      3. Seniority?

    3. Name the tiers.  

  2. Assign wage rates and modifications (and integrate current positions)

    1. Assign standard wage rates to each category, according to the guardrails agreed-upon in Step 2.  

    2. Add any wage modifications.  Some examples: 

      1. $0.30/hr for bilingual work

      2. $0.50/hr for using personal car for work purposes

    3. Integrate current positions with categories and assign wage rates accordingly.  

  3. Create procedures for evaluations and raises.

    1. When and how do you conduct evaluations?  Who conducts them?  How are promotions decided?  

    2. Is there a cost-of-living / inflation raise every year?

      1. If so, is it the same every year (e.g., 1.9% per year year), or does it change based on the cost-of-living adjustment (COLA) from the Social Security Administration (e.g., 2.5% in 2025 and 2.8% in 2026, historic data available here)?

    3. Is there a standard seniority / retention raise each year (e.g., $0.25/hr per year)?

Althea has created a short presentation on this topic with a few slides here: Creating an Equitable Pay Scale

If you want to work with Althea to help develop a payscale for your business or organization (or to manage your books!), you can contact her at:  althea.baird at gmail.com. 

To be clear: we haven’t done this yet at Fishadelphia because we’ve been busy doing other things.  (Currently everyone at Fishadelphia is paid the same hourly rate and we do our best to implement at least a cost-of-living increase every year based on the federal COLA.)  It’s on our list of priorities to implement in the next year; we can let you know how it goes!

 

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