Conscious Compensation® Principles: Equitable, But Not Always Equal

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Uncategorized

 

This week, the White House posted “These Businesses Are Taking The Equal Pay Pledge” listing 28 companies that have done so.

The blog post opens with, and some companies repeat, the misleading datapoint that “the typical woman working full-time all year in the United States earned only 79 percent of what the typical man earned working full-time all year.”

One company, Glassdoor, is quite clear about this purported gap:  “While Glassdoor analysis reveals a 20 percent pay gap in the average base pay between men and women, when we control for age, job title, job level, department, and employee performance scores, the pay gap disappears.”

Glassdoor is one of the few companies willing to state this politically incorrect truth:  When one gender group is paid more than another, it can be explained by the higher paid group’s members’ age (a proxy for years of experience), value of the job (job title and level), department (IT vs. HR), and employee performance. Yet another, Popcorn Heaven, says they want “to spread awareness of the prevalence of unequal pay” implying that if pay is not equal then it must be wrong.

There may be inconsistencies in how companies hire, promote, develop, and evaluate males and females, and a combination of those differences may produce a difference in pay between men and women.  But the solution for this is not to artificially adjust pay so that it is equal but to fix the other processes which will result in what Glassdoor’s analysis found:  men and women are paid equitably for the work they do, and that should not necessarily be equal because that would be inequitable, and unfair.