A Wise Business Move
It’s not just the right thing to do, it’s the smart thing to do. Employees who are paid fairly are more loyal and productive. Here’s how employers can create a culture of equity.
- Most Americans want to work for organizations that treat people fairly. Employee satisfaction is highly connected to whether employees feel they are paid fairly and how fair and transparent their employer’s approach to pay is.
- Gender equity is essential for organizations to perform at the highest levels: A study by McKinsey and Co. management consultant found that “companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability.”
- The study also found that profitability at companies with extremely low levels of gender diversity lagged behind modestly diverse companies. Even making a few steps toward a diverse workplace can improve an organization’s performance.
- An examination of the impact on stock performance of women’s presence on corporate boards and found that stock prices of companies with a gender-diversified board outperformed those with an all-male board, and the advantage held over one-year, five-year, and 10-year intervals.
- Having women as decision-makers helps the company better serve women consumers. The Center for Talent Innovation, a business-backed think tank, found that a diverse workforce “can be a potent source of innovation, as diverse individuals are better attuned to the unmet needs of consumers or clients like themselves.”
So how can your workplace better foster gender equity?
- Commit to conducting regular pay audits. Analyzing compensation by gender (as well as by race) allows companies to identify inequities and take steps to correct them.
- Abandon the practice of using salary history to set wages. This perpetuates the gender pay gap because it assumes that prior salaries were fairly established. Employers should instead use market research to determine what a particular position is worth to the organization.
- Adopt practices and policies to encourage salary transparency. Job descriptions should include salary bands for each position and role within an organization. Pay secrecy policies — such as ones that punish employees from discussing or inquiring about wages — should be abandoned. Such policies make it difficult for workers to remedy wage disparities because they cannot find out if they’re being paid less.
- Commit to a culture of fairness and equity and build that into their core values. Employers need to review their hiring and promotion practices to make sure women have equal opportunity. They need to proactively ensure that women are in the leadership pipeline — and to offer the necessary resources, training and mentorship programs to help them succeed.
- Ensure workplace flexibility so that women — and men — can better balance the demands of their home life with their jobs. Good parental leave policies — as well as leave for other types of family caregiving — are essential to enabling everyone to succeed and advance in their careers. Many workplaces are built on an old model of family, but it’s essential that companies adapt to the reality of contemporary life. Today’s workforce expects it — even demands it.
Gender Tracking in Higher Ed
Fast Facts: The Gender Pay Gap
Workplace and Economic Equity