Meaning ● Algorithmic Pay Equity, within the framework of SMB operations, signifies the application of automated computational processes to evaluate and rectify gender, racial, or other demographic-based disparities in compensation. It allows SMBs to leverage automation to reduce biases embedded in traditional pay structures, promoting fairness and compliance. ● Automation’s role here focuses on analyzing data points to pinpoint anomalies that might not be immediately apparent in manual reviews. Often, SMBs implement algorithmic solutions, sometimes embedded in HR software, as part of their growth strategy to attract and retain talent sensitive to equitable compensation practices. ● Its implementation requires SMBs to first define the metrics of pay equity most salient to their values and legal obligations; followed by a comprehensive data audit to identify anomalies, and then calibrate the algorithmic model based on both data and principles of justice, requiring ongoing human oversight.
