Question: Is there a difference/similarity between Pay Analysis Groups (PAGs) and the Similarly Situated Employee Groups (SSEGs)?
Answer: Yes. There’s actually a big difference between Pay Analysis Group (PAG) and Similarly Situated Employee Groups (SSEGs).
- SSEG: Everyone in a particular SSEG are performing duties and tasks that are similar and for that reason, it is appropriate to assume that everyone in an SSEG should be paid the same after controlling for relevant explanatory factors (e.g., tenure, performance, education, etc.).
- PAG: A PAG is generally comprised of two or more SSEGs. PAG analyses require the analyst to control for qualitative SSEG differences (e.g., job title, pay grade, job function).
Why do we need PAGs if there are SSEGs? The simple answer is sample size. For example, it is possible to analyze 3-SSEGs that, by themselves, are too small to be analyzed with regression methods. By aggregating the 3-SSEGs together and controlling for important qualitative SSEG differences (e.g., job title), it is possible to evaluate the 3-SSEGs for pay disparity.
Answered by: Dan Kuang, Ph.D.; Vice President – Legal and Audit Support Services at Biddle Consulting Group