Relative Pay Band Development as a Governance Instrument for Analyzing Compensation Equity Dynamics

This working paper introduces the Relative Pay Band Development (RPBD), a governance-oriented indicator for analyzing changes in internal compensation structures over time without disclosing individual pay data. Building on concepts of procedural and distributive justice, the RPBD focuses on the relative dispersion of compensation within defined comparison groups and its temporal development. The indicator relies exclusively on aggregated measures (minimum, maximum, and median pay), enabling privacy-preserving monitoring of structural dynamics such as convergence, stability, or divergence in compensation structures. An illustrative example demonstrates the calculation and interpretation of the RPBD and highlights its applicability in data-sensitive and co-determined organizational contexts. This paper is published as an open-access working paper and assigned a persistent DOI to ensure citability, transparency, and long-term availability. The manuscript may be revised and submitted to a peer-reviewed journal in a later version.