Today’s Equal Pay Day is an important day. He draws attention to the unequal treatment of women in terms of pay. That’s good, because almost everywhere in Europe women with the same qualifications and comparable careers receive less salary than men – in Germany, women earned an average of 16 percent less per hour than men in 2025 (unadjusted gender pay gap). They also have poorer chances of obtaining leadership positions, also because top positions are still rarely filled part-time and women still take on a large part of the care work and therefore do not work full-time. None of this is fair treatment or fair compensation.
Now the EU Pay Transparency Directive, which must be converted into German law by the middle of the year, is intended to help close the gender pay gap. It is undisputed that we are getting closer to this goal, because the trend is already showing: the gender pay gap is getting smaller year after year, albeit slowly. But the goal shouldn’t just be to close the gender pay gap. Because if women and men are paid the same, that doesn’t mean it’s fair. It sounds strange at first, but it’s not.
Because: Is it fair that women and men in the same position earn the same? The answer is: yes, but. Because this approach does not yet take real performance into account. But performance should still be taken into account in compensation. Otherwise, top performers will quickly no longer give their all if they know that others with the same or equivalent work earn the same as them, even though they do less.
However, this is what the interpretation of the EU directive could boil down to: If we agree on average when it comes to remuneration instead of paying based on performance – won’t we then also provoke some employees to feel that they are being paid unfairly?
Companies should introduce a fair salary system
It would therefore be better to establish a really fair salary system and make it transparent. A system that creates fair conditions for everyone, regardless of gender. With such a system, not everyone in a comparison group would earn the same – that would be misunderstood fair pay. Rather, managers should set fair assessment standards for performance and use these to determine salaries.
All employees would then be able to understand what their salary is based on and what they contribute to the company’s success. Even if it would be difficult for companies to justify such assessment standards in such a way that they would stand up in court, it would be worth it. It would promote achievement and it would be fair. Because fair doesn’t mean equal. And with the closing of the wage gap between women and men, fair remuneration has not yet been established.
Kirstin Grundel deals with the topics of compensation & benefits, remuneration and company pension schemes. She also works as an editor for the magazine “Comp & Ben”. She is the editorial contact for the Total Rewards practice forum.
