Terms used in Pay and Employment Equity Reviews

Base pay

Annual cash pay, excluding benefits and discretionary pay.

What is equal pay?

Equal pay is generally understood to mean a rate of remuneration for work in which there is no element of differentiation between male and female employees based on sex—where the work of male and female employees is substantially similar and calls for the same or substantially similar degrees of skill, effort and responsibility and is done under similar conditions.

The Equal Pay Act 1972, the Employment Relations Act 2000 and the Human Rights Act 1993 all contain provisions relating to gender pay discrimination and provide complaints-based mechanisms for employees to seek redress for gender pay discrimination claims. The Equal Pay Act applies to employees in both the both private and public sectors. Public sector employees are also covered by the Government Service Equal Pay Act 1960.

What is pay equity?

Pay equity means gender doesn’t affect what people are paid. It means women receive the same pay as men for doing the same work and for doing work that is different, but of equal value. The value of work is assessed is assessed in terms of skills, knowledge, responsibility, effort and working conditions. Other considerations in setting remuneration can include market rates, productivity and performance.

What is employment equity?

Employment equity is about fairness at work. It means identifying and removing the barriers that prevent women from fully participating at work.

Almost half the women workers in New Zealand are in occupations that are more than 80% female, and the female-dominated occupations tend to be lower paid. Women are still under-represented in higher-level jobs.

Equity and equality

Equality refers to being equal or the same; equity refers to being just, fair or impartial. In the employment equity context, equity refers to proportionality between differences in relevant characteristics of people and jobs and how they are treated.

Explainable

Reasons can be provided for something; it can be made plain or comprehensible.

Job evaluation

A structured analytic process to determine the ‘size’ of different jobs within an organisation by examining skills, knowledge, responsibilities and working conditions. Establishing internal relativities between jobs (their ‘size’ relative to each other) in an organisation contributes to establishing pay rates and grading structures. The measurement process generally involves a number of factors and results in a numerical score. 

Justifiable

Adequate grounds can be provided to establish that something is right or valid. One important reference point for considering whether something is justifiable is whether it is lawful. However, some practices and treatments that are within the law may still be found to be unjustifiable.

Remuneration

The sum of all direct and indirect cash payments to an employee. It can include cash and non-cash rewards such as base pay, allowances, health insurance, childcare allowance, personal use of a company car, superannuation contributions and bonus payments.

Total cost package

Base salary, benefits, actual performance payments and fringe benefit tax on benefits received.

Total gross package

Base salary plus any benefits in package, but excluding fringe benefit tax.

Terms used in analysing data

Average (or mean)

The average is the most commonly used measure. The sum of all the data is divided by the number of items.

6+4+6+8=24;
24÷4=6;
average= 6

The average can be skewed by very large or very small numbers within the sample.

Lower/upper quartiles

The bottom quarter and the top quarter of the distribution of values.

Median

The number in the middle of the series of numbers or the 50th percentile in a range of data.
12, 13, 23, 44, 55
Median is 23.

Mode

The number that most frequently occurs. 

Range

The difference between the largest and smallest number.