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Many organizations grant employees a salary increase on an annual basis. When associated with employee performance, these increases are often called merit increases. Given laws prohibiting discrimination in employment decisions based on race/ethnicity and gender, among other protected classes, organizations may be concerned about evidence of gender or race/ethnicity differences in the merit increase process. This paper will explain how an employer can evaluate such potential gender and race/ethnicity differences.

As shown in the sections below, studies evaluating employment decisions for evidence of gender and race/ethnicity differences should try to mirror the decision-making process. To mirror the decision-making process, an organization should ask a series of questions before conducting such a study.