Comparable value is a principle that states that people performing work of equal value should receive similar levels of compensation regardless of gender, ethnicity, nationality, etc., but with the exception of legally permitted differences, such as level of performance, seniority, location-based assignments, etc. .
Jobs have organizational value that can be measured and compared across jobs with highly differentiated content. Tools such as job evaluation can be used to explain these differences in terms of job levels, skills, competencies, length of training, and amount of responsibility, etc.
In the US, despite the Equal Pay Act of 1963, it is legal to discriminate in pay if one’s work is not exactly identical to another’s work. Critics of equal pay for equal work argue that comparable pay for comparable work (comparable value) would be much more effective in addressing gender pay gaps in the US. Comparable value implies “comparing” rather than a measure requires equality. Employers constantly compare jobs internally through job evaluation and externally through compensation and benefits surveys.
In the US, this principle is largely applied to gender-based pay discrimination. However, what about expat pay? Expatriate compensation typically uses the local salary as the basis of a grantee’s pay. For example, examine two equally qualified, experienced expats doing work of equal value, side by side, in a third country. The expatriate from a country with higher wages/higher cost of living earns more than their colleague from a country with lower wages/lower cost of living. Does it mean that the two expatriates must be paid the same amount to achieve the principle of comparable value?
Comparable value seeks to ensure comparable pay for comparable work. The reality is that every dollar earned by the expatriate from the country with the lowest cost of living will go further in their home country than it will for their colleague. To ensure that the principle of comparable value is applied it is necessary to ensure that wage purchasing power parity (SPPP) is achieved.
SPPP calculates how much you need to earn elsewhere to compensate for cost of living, hardship and exchange rate differences, to have the same relative purchasing power and, as a result, have a similar standard of living as you do in your current rental .
No company pays market rate, because there is no single universally accepted appropriate rate for any job. The actual payout is influenced by goals related to the market, competition, perception, retention fears, circumstances, and legacy. Expatriate pay is further influenced by the cost of living, economic hardship, and exchange rate differences. Whether we have comparable pay for comparable work or equal pay for equal work or even equal pay for equivalent work, the principle is the same. People who do work of equal value should be rewarded equally without discrimination. In the case of expatriates this implies salary purchasing power parity.