Why Do We Fight Against Gender Pay Equity?

Twenty-five years ago, I worked for a local employers association.  One of the “hottest-button” issues we faced, and what we continually fought to “protect” our members from, was the evil boogie-man of “comparable worth.”  The concept was evil, of course, because it originated on the labor side rather than management side, from protesters rather than the board room.  This was nonsensically, as I would learn over time, because most large employers had job evaluation features in their compensation programs designed to achieve exactly what comparable worth sought to achieve.  Decades later, despite all our efforts to be known as “employers of choice” we continue to resist one of the best ways we can to become employers of choice.   Both SHRM and World at Work issue op-ed pieces on the supposed “interference” of equal pay proponents on the supposedly free market and the ability of organizations to do business as they see fit.  I believe it is exactly that type of knee-jerk reaction to ideas “from the other side” that blinds us in our ability to recruit and retain the best and the brightest.

The consulting firm Accenture yesterday released a report called Getting to Equal 2017, outlining its thoughts concerning how the gender pay gap could close in developed markets by the year 2044, 36 years earlier than previously estimated.  It sets forth three main ways to address this challenge: digital fluency, career strategy and tech immersion. Interestingly, all of these tactics are focused on things women can do individually to help themselves, and do nothing to address the systemic problems within the labor market that perpetuate the pay gap, and continue generally unabated.

There should be a conscious effort on the part of human resources management to identify the gender pay gap problems in their organizations and address them, if not for “moral” reasons, than simply because it makes good business sense.  Ensuring that half your work force and potential labor pool appreciate your commitment to fair compensation should be a competitive advantage for you, not a burden.

It is hard to imagine organizations deliberately engaged in pay discrimination, and frankly, this is not where most of the problems occur.  The use of seemingly innocuous (and often “industry standard”) pay methods accounts for far more discriminatory impact than bald-faced discrimination:

  • Failing to properly recognize the value of jobs to the organization.  A truly equitable pay plan will ensure that compensation opportunities are the same for jobs of equal value to the organization.  People know the values of their jobs internally (or at least have a position on it); witness the age-old battle in the auto industry between the accountants and engineers as to who is more important.   While “value” may seem to be in the eyes of the beholder, there are simple and straightforward job evaluation models that allow any organization to see, in an objective way, how each job contributes to the organization’s success.   Taking this approach minimizes the inherent biases that occur when jobs are seen as “women’s” or “men’s” (or any other demographic characteristic, for that matter).  It is important to be aware, however, that bias can still make its way into the most well-designed job evaluation plan if evaluators are not challenged on the rationale for their ratings.
  • Relying solely on labor market data to establish pay opportunities.  Survey firms’ advertising notwithstanding, the quality of labor market data can be suspect at best. As such relying on market data alone to set pay is already a poor business practice. However, since it is well known that there are inherent biases in the labor market impacting jobs typically held by women, using labor market data to set pay opportunities merely perpetuates the problem.  This is particularly problematic for entry-level jobs.  As employers are thought to have more leverage on individuals in these generally less-skilled roles (because of their need for flexibility, desperation or other factors), employees (typically women) can be paid less.  As an employer you may feel that you are being “competitive,” but when “competitiveness” is based on an underlying bias, you may not be “fair.” Add to this the fact that “competitive market rates” are frequently insufficient to maintain a decent standard of living, the inevitable churning and turnover makes this type of approach a poor business practice.
  • Basing pay decisions on employees needs.  Most larger organizations recognize the inappropriateness of pay decisions based on employee circumstances; however, it is not that uncommon in smaller organizations for employees to be given a raise when another child goes to college, or be paid less because a spouse is well-compensated, or for some other seemingly good reason. It might seem as if the employer is being benevolent, but is actually the opposite.  This may also occur because of the next concern…
  • Managing pay by negotiation.  It is said that part of the gender pay gap can be accounted for by women’s inability (or preference not) to negotiate aggressively. Internet articles suggest that it is a woman’s obligation to “get what she deserves” through negotiation.  The problem here is quite simple to state — if your pay plan can be impacted by individual negotiation, it is not a good pay plan. Employee compensation should be based on the value of the job and the performance of the individual alone, and if negotiation is allowed to change that equation, the credibility of the program is diminished.  You should not be putting the burden on your employees to fix the pay inequities themselves; you should be paying everyone what they are worth, regardless of any of their characteristics.

As a profession, those in human resources should not be content with waiting another 27 years to fix a problem they could fix within a year.  Creating a compensation program free of gender bias, intentional and unintentional, should be one of the primary objectives for every organization.

About Edmund B. Ura

Edmund B. Ura, MAIR, JD, works with governing boards, executives and human resources staff to develop methodologies for ensuring fair and equitable compensation programs that support achievement of organizations' missions. Contact Ed at ebura@mercesconsulting.com.

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