Published May 2026
This article is co-authored with Charlie Higgins (from the company Syndio, which is the industry pioneer in global pay transparency solutions) and was first published on his LinkedIn blog - here.
"Most pay equity content is noise."
Eduard Blum said this ten minutes into our conversation, and it landed like a sentence I'd been waiting for someone to say.
Rewards leaders aren't stuck because they're not working hard at this. They're working very hard, running analyses, modeling remediation, building EU Pay Transparency Directive readiness
programs. The strategy still doesn't feel strategic. The CFO conversation gets harder, not easier. Something structural is off.
Eduard has been writing about what.
He's a Munich-based global rewards leader who's worked across Europe and just published a book on this topic titled “The Equal Pay Guide - A Practical Framework for Understanding, Explaining, and Managing Gender Pay, Equal Pay, Pay Equity & Pay Transparency”. His
argument is that the structural problem has a specific shape: most leaders use four different words to describe pay equity, and they mean four different problems. They build one strategy. They
get one set of results that doesn't connect to the others.
I asked him why he thinks the conversation has gotten so muddled. Here's how he put it.
It’s because everybody cares – from employees to bosses and from politicians to the media and everybody in-between – all stakeholders do care about pay equity now. While this
is a unifying factor, the perceptions and ambitions around pay equity differ. In other words, everybody cares – but everybody cares differently.
It seems that most companies don’t want to acknowledge it. The reality now is that navigating investors’ demands, journalists’ requests, and employees’ perspectives requires companies to cut
across different values, methodologies, and worldviews. This quickly becomes overwhelming and muddles conversations.
We need a common framework everybody can agree on despite their differences. I believe the solution is to divide the landscape into its underlying fundamental concepts:
Gender Pay, Equal Pay, Pay Equity, and Pay Transparency.
The four terms we keep using interchangeably
The four terms Eduard keeps coming back to are: Gender Pay, Equal Pay, Pay Equity, and Pay Transparency.
Most people I talk to in HR use those interchangeably. Eduard's argument is that this is the entire reason companies feel stuck. You can't solve a problem you haven't defined.
I asked him to walk through each one the way he does when he's training rewards teams. This is his definition, in his own words.
The danger is that everyone has some understanding of the concepts but, in my experience, each concept is deeply misunderstood.
Let’s review the fundamentals in turn – definition, measurement, and organisational implication:
-
Gender Pay considers pay disparities across genders and is usually measured via the raw Gender Pay Gap (rGPG), allowing for statements such
as:
“On average, for every 1€ a male employee receives, a female employee receives [XX] cents”.
The rGPG is heavily influenced by pay distribution (e.g., outliers) and workforce composition (e.g., gender representation in leadership roles).
Accordingly, Gender Pay outcomes are closely intertwined with broader gender equality dynamics such as attracting female candidates into STEM roles or advancing women into senior leadership. As a result, influencing Gender Pay requires coordinated actions across the entire HR value chain — far beyond compensation alone.
-
Equal Pay reflects the principle of “equal pay for equal work” and is usually measured via the adjusted Gender Pay Gap (aGPG) which is a
statistical measure derived from a regression analysis.
It allows statements such as “On average, for every 1€ a male employee receives, a female employee performing equal work receives [XX] cents”.
Equal Pay rests on two core conditions, firstly, whether a gender-neutral compensation system is established and, secondly, whether it is applied equally across genders. Where these conditions are met, unexplained pay differences should be minimal and defensible. Where they are not, remediation becomes necessary.
-
Pay Equity is the principle of “equal pay for work of equal value”. Like Equal Pay, it can be analysed using the aGPG and depends on the
integrity of the compensation system.
However, its central organisational implication is different. Organisations must define what they consider “work of equal value”. This requires explicit choices about job architecture and comparability across functions. These choices are neither purely technical nor universally standardised but rather reflect organisational philosophy and values.
-
Pay Transparency refers to the degree to which an organisation openly shares information about employee compensation. Companies’ progress
can be assessed using the Pay Transparency Maturity Framework and managed through the lens of ‘organisational justice’ (which reflects the extent to which employees perceive
pay outcomes, processes, and communication as fair).
Equal Pay takes center stage in June 2026
The EU Pay Transparency Directive comes into force in June 2026 (well at least for a few EU member states that will have transposed), and the part tripping people up is that it bundles all four
concepts into a single regulatory package.
You have to report your unadjusted gender pay gap. You have to demonstrate equal pay for equal work and for work of equal value. You have to respond to individual Right to Information requests
and publish your gap. And if your unadjusted gap exceeds five percent in any category of worker, and isn't justified by objective gender-neutral factors, you owe a joint pay assessment with your
works council.
That isn't one problem. That's four problems, each with different data requirements, different stakeholders, different timelines, and different consequences if you get it wrong. Equal Pay is the
most prominent one for many companies.
Companies working on Equal Pay are about to find out that running an analysis once a year and remediating the obvious gaps doesn't hold up as a strategy. It's a treadmill. You fix the issues in
March, hire and promote through summer, and by the time you run your next analysis, the gaps have grown back.
Eduard calls this the "find and fix cycle." When I asked him to describe what he's actually seeing inside companies right now, this is what he said.
Companies that tackle Equal Pay (as measured by the adjusted Gender Pay Gap) for the first time, tend to focus on the questions of:
- Is there an Equal Pay issue?
- How large is the issue (the adjusted Gender Pay Gap)?
- How do we close it?
Addressing them takes companies through a long and arduous Equal Pay review. But such an annual “fix and find cycle” is only a point-in-time assessment. Equal Pay is not a static outcome but a dynamic condition that evolves with every pay decision made.
This means that the achieved closure of an Equal Pay gap must be continuously managed to be sustained. In practice, this should be implemented by reviewing Equal Pay with
every pay decision e.g., hiring, promotion, off-cycle pay increases.
Let’s consider a hiring case. An open position is associated with a pay band. Based on the candidate’s skills and experience, their pay within the pay band is determined. This positioning
should be reviewed against the predicted Equal Pay positioning. When a female candidate (falling low into the pay band) possesses the same skills and experience as her male counterpart (who e has
negotiated a higher pay), the predicted Equal Pay positioning can signal a gap. This can then be addressed before the hiring offer effectively preventing a gap before it occurs. This way Equal
Pay is incorporated into business-as-usual instead of compounding gaps over time and requiring remediation during an annual review.
The overlooked question Eduard wants people asking
While Equal Pay takes center stage, Eduard argues that the question of “where on the Pay Transparency scale do we need to be and where are we currently at?” is often overlooked. Moreover, Pay
Transparency is often defined vaguely and is missing an operational method of managing it.
To address this, Eduard has developed the ‘Pay Transparency Maturity Framework’. He lays it out in his book. Low Pay Transparency maturity means employees have limited insights into e.g., how
jobs are being graded or how bonuses are determined. High maturity, for example, discloses Gender Pay Gaps or CEO-to-worker ratios to employees.
This is the part of the conversation that stuck with me the most. Most companies are at the lower end of the curve. The Directive is mandating them to perform at the higher end. There's no
natural ramp built in. So I asked Eduard to describe the framework in his own words.
Pay Transparency spans an expansive rewards-landscape and is central to compensation management. However, for most companies, it is a vague concept and difficult to manage.
Therefore, I have developed The Pay Transparency Maturity Framework to enable organisations to assess their current transparency position, take targeted management actions,
and measure progress:
The baseline for the Pay Transparency Maturity Framework is formed by mandatory regulatory requirements. This regulatory baseline is complemented by a voluntary pay transparency maturity
continuum. Organisations can determine where they wish to position themselves along this continuum depending on e.g., their strategic objectives, culture, and regulatory environment.
The maturity continuum comprises five sequential stages. Each stage builds on the previous one and reflects increasing levels of transparency from an employee perspective. While it may be
technically possible to skip stages, doing so often creates transparency gaps that may later be challenged by employees.
The continuum adopts the perspective of the employee. Once the employee questions at each stage can be answered clearly and consistently, the respective stage can be considered
achieved.
The stages are as follows:
-
What pay elements am I entitled to?
To complete this stage, employees need to understand which compensation elements they are entitled to and how much these are worth.
2. How is pay determined?
This requires an understanding regarding the mechanics of the compensation system. Employees should understand e.g., how jobs are evaluated and graded, how salary ranges are established, and
how variable compensation or bonuses are determined.
3. Why am I being paid this amount?
At this stage, the generic description of the compensation elements and compensation system is being applied to the individual worker. Employees should be able to comprehend how they fit
within this context e.g., explain how their particular performance impacts their pay and why their pay level is adequate.
4. Where is my position in the salary band?
Transparency at this stage requires the existence of salary bands or benchmarking references. Employees should have visibility of the relevant salary range for their role or grade and
understand where their own pay sits within that range. Where formal salary bands do not exist, appropriate market benchmarks may serve as a reference point.
5. What are others paid?
The final stage introduces transparency regarding colleagues’ pay. This can take on many forms including e.g., Gender Pay Gaps, CEO-to-worker pay ratios, aggregated average pay for certain
job titles, disclosure of individual employee’s pay.
The EU Pay Transparency Directive comes into play as pay transparency regulation. What it does is pushing companies into ‘Stage 5: showing what others are paid’ e.g., via raw Gender Pay Gap
reporting. However, companies may not have advanced through these sequential stages and may remain at lower stages. This gap creates tension.
Completing the journey along the Pay Transparency Maturity Continuum may appear straightforward in theory. In practice, however, organisations frequently encounter structural and
communication gaps at each stage. I’d be glad to dive into these shortcomings in more detail in our next conversation.
What this means for rewards as a function
There's one more thing from our conversation I keep coming back to, because I hear versions of it at every rewards roundtable we host.
Eduard said most rewards professionals are excellent at the technical work. Compa-ratios, incentive system design, merit cycle modeling. What many of them tell him they struggle with is the
strategic question their CEOs and CFOs actually ask: "What should we be doing differently?"
That gap is what keeps pay equity stuck as a compliance burden instead of a strategic lever. If the conversation stays in spreadsheets, it stays in HR. If it moves into "what does fair pay mean
for our business, for the decisions we want our managers making, for the company we're trying to build," it moves into the executive team.
I asked Eduard what he's seen separating the rewards leaders who make that leap from the ones who don't.
I believe there are many differentiating factors – two central ones are ‘curiosity’ and ‘courage’.
Truly exceptional Reward leaders cannot be contained by silos. Their curiosity pulls them out of their comfort zone to look beyond Rewards into HR and the business in general.
Enriched with these insights, they can apply their learnings to have an even bigger impact via Rewards. In Equal Pay, for example, this means tying together how to conduct an Equal Pay analysis
(Rewards), with frameworks embedding it within HR (e.g., Talent management and DEI), and taking actions that align with business goals and values (e.g., business strategy and
finances).
This requires courage. Not only to venture beyond, but also to form your own opinions, and to make your visions reality. Reward decisions often add up into the high millions. Being responsible for it takes guts.
Rewards still has a lot of untapped potential – as do the other fields of HR. I am certain that the future of HR will be to grow into the evidence-based management practice
it is ought to be. I look forward to it and will gladly continue pushing forwards on this path.
What's next
The thing I keep coming back to is the diagnostic itself. Before you can build a pay equity strategy that works, you have to know which of the four problems you're actually solving. Most
companies haven't done that work.
If this reframe is useful, tell us in the comments which of the four you find yourself confusing most often.We’ll be reading.
If you want more of Eduard's thinking, his new book “The Equal Pay Guide” is a good place to start. He's been working on this
problem from the inside for a long time.