Bloomberg published an excellent article about the recent Amazon suit, What Job Seekers Can Take Away from the Amazon Equal Pay Lawsuit
. These lawsuits are part of a broader movement that extends beyond pay equity and looks at systematic under leveling, captured by cases like Amazon and Google and embedded in the new disclosure laws coming out of California and the European Union. This comes on the heels of $100M+ settlements with other employers including Riot Games, Sterling Jewelers, and Goldman.??
Bottom line:? there's going to be more scrutiny on how decisions impact someone’s long-term career and more disclosure laws that seek to impact this.?
So what can employers take away from the Amazon lawsuit??
Companies often pay people within the same job band similarly.? But how employees are slotted into those bands, and why, can be subject to discretion. That is the crux of the Google case settled earlier this year and now Amazon.?
The (multi million dollar) question: Is your company applying statistical rigor to people and pay decisions or are you letting managers sleepwalk you into lawsuits because you did anti-bias training and said, “problem solved”.?
Here are a few tips for employers:
- Identify areas where there may be excessive subjectivity and where organizations can apply more discipline and rigor to discretionary decisions. The tail shouldn't be wagging the dog but that's what happens in practice when you allow discretion and focus on a salary expectation.? Software can help you have better governance of pay decisions so that you are paying people based on the role, their skills and their experience.? It helps your team make data-informed pay decisions based on your comp philosophy, not someone's sole discretion.
- Take a look at your methods of annual performance reviews and vague potential assessments. The old methods hold organizations back from harnessing the true talent of their people. The fact of the matter is, leaders and managers are forming opinions about their teams performance, their potential, and who's on the bench for future promotions when positions come available. The less formal or visible these opinions are, the less we can use them to intentionally plan, and the more room there is for bias to creep in and get us more of the same results. What do those current results look like? Our analysis of EEO-1 data shows that in the private sector, white men are 31% of all employees but 57% of executives.
(As a side note, our recent worker sentiment survey
revealed that 1 in 4 employees say they believe their supervisor’s bias negatively impacts their performance review.)
- Don’t run overly narrow pay equity analyses. We have heard EEOC call these “divide and hide” type analyses and that is descriptive.? What might a “divide and hide” type analysis look like?? It might mean looking only at people in the exact same role and in the exact same level and exact same geographic area, without taking a broader look at leveling issues.
- Pressure test your job architecture. If you look at your job descriptions for the level above and below and they look identical, this could be an issue.? Is the pay range for Level 5 roles $50,000 - $150,000 and the range for Level 6 $70,000 - $170,000? This might suggest a weak job architecture. Are your TA leaders hiring for multiple levels within a single job posting?? (One hint might be overly wide ranges for the role.)? Most job architecture systems were not built for this new world of transparency.? Our partners at Aon routinely help employers with this work – helping employers bring their job architecture programs into this new transparency era.
In fairness to Amazon, they take transparency seriously – they share gaps publicly and even employ in house labor economists. I have no idea if there is any merit to the allegations against Amazon, but what we have seen in the past is that you can train people all you want, but you won't train bias out of them.?
This is why software is so important:? it helps guide discretion as to what to pay folks, where to level them. Those decisions should involve the consideration of all the other decisions you've made and humans can't do that - software can.
Semi-Retired in Western North Carolina
11 个月The fundamental of any compensation plan is the concept of equity, both internal and external. You must be able to explain, in a logical manner, why you pay people what you do. Like anything that has a legal implication, you have to consider how a third party (like the court) will view your non-logical decisions. If it quacks like a duck.....
Semi-Retired in Western North Carolina
11 个月The "structure" gets created first, then the people get placed in the structure. Bob is correct, as usual!
Compensation Advisor to Companies&Boards,HR Strategy Expert,Litigation Support,Speaker,Blogger,Mentor,Volunteer Leader
11 个月99% right and important..BUT people aren't slotted into grades-Jobs are slotted into grades. If you don't do that step right, the rest is not useful to defend or help your company... Bob n
Co-President/Co-Founder, Workforce Sciences Institute; pioneering Labor/Organizational Economist and Workforce Scientist, well-known authority on Human Capital Measurement and Management, Advanced Workforce Analytics
11 个月Absolutely! Disparities in female and non-white representation across career levels as compared to their male and white counterparts are almost universal across organizations. Given that career level alone explains much of the variance in pay across employees - sometimes 70% or more - these disparities explain the persistence of raw pay gaps even as so-called "adjusted" pay gaps fall dramatically. This puts the challenge of career equity front and center in the drive to achieve real equity in the workplace. Inequity can start at the time of hire. In one client organization I worked with recently, we found that non-whites were being assigned on entry to lower levels than otherwise comparable whites. The differences in probabilities were statistically significant and sizeable. Such differences compounded disparities in other aspects of career advancement. Employers who are serious about DEI need to treat pay and career equity as two sides of the same coin and rigorously examine how they interact with each other. With today's analytics, this is not a difficult job. It requires the will to manage them proactively to achieve desired outcomes. https://sloanreview.mit.edu/article/opening-access-to-the-fast-track-for-career-equity/
Syndio | Fairness at Work | Workplace Equity
11 个月Love the line don’t let “managers sleepwalk you into lawsuits” ???????? Data allows organizations to be proactive in seeing potential inequities to address and can save… millions!