We need to fix representation of women at all levels in organizations. While there are cracks in the glass ceiling, it is not broken. Yet. Only 23% of executive roles are held by women. Organizations should be focused on improving representation. But we should not conflate representation with pay equity.
What do I mean by that? Pay equity is about paying women the same amount of pay as their male colleagues assuming that job role, experience, skills, and performance are comparable. We need to fix both –representation and pay inequity. But they are two different problems. They require two different methods of analysis and two different sets of fixes.
How are representation and pay equity conflated?
One of the main problems with how pay gaps are calculated and reported is that organizations simply make two long lists and calculate the averages or medians of men and women’s pay, reporting the gap between them. One of the main drivers of the (always) large gap is that there are more men in executive (high paying) positions. Added to that is the fact that the pay gaps between executives and the mid and lower tiers of the pay scale are huge. Executives earn five, 20, 150 times more than the people who work in more average roles1. The executive pay issue alone is enough to skew overall averages.
Getting more diversity in the executive suite is a separate goal and of course a worthy one. But it does not address the pay equity challenge. The first step to addressing both issues is to separate them.
If we separate representation from pay equity, do we still have a problem?
Pay equity is about paying men and women an equitable amount of pay assuming that relevant variables in pay are essentially the same. Meaning, a man and woman that have the same role, similar experiences, similar performance, similar skills, etc should be paid about the same amount. It is as simple as that. But, and yes there is a but, therein lies the complexity … what variables are relevant to one’s pay? How do we measure those variables?
In my next blog I will explain how pay equity should be assessed. But here is a teaser … performance matters.
Continue to check out my colleague Debra Logan’s blog as well … we are both working on Gartner’s EPIC program, a way to resolve pay equity across the world in 5 years. Exciting!