Efforts at employment DEI have experienced some backlash in the last year or so. As a result, employers are backtracking a bit. Nevertheless, companies are continuing to make strides, even if not so obviously. One aspect of DEI is the issue of pay equity versus pay equality. There is a difference. Pay equity is much easier to understand and reconcile. Studies show that male and female engineers with approximately the same credentials and experience will indeed receive the same pay in most companies. Pay equity doesn’t seem to be the primary issue. More insidious, and less obvious, is pay equality, which focuses on the barriers women face in upward mobility to high-er-paying positions.
A study by an MIT professor followed new management-track employees at a large retailer. Women made up about half of the entry-level workforce. At the next level, the percentage of women dropped signifi-cantly. As more senior management positions were achieved, women were a dramat-ically smaller percentage of that workforce.
One fascinating aspect of the study was that on average the women graded higher than men on their annual reviews at all levels. Nevertheless, they graded lower on their “prospects” for higher-level management in the future. There was no basis for this lower grade and, in fact, it ran counter to the results of the annual reviews. The study also showed that the company made a stronger effort to retain higher-graded men than the similarly (or higher) graded women. This suggested clear hidden bias against the women employees. This was true regardless of whether the reviewing manager was a man or a woman. Employers must be mindful of this subliminal pay inequality – i.e., barriers to advancement – and not simply tout the fact that they have pay equity because their men and women employees in the same or similar jobs earn essentially the same amount. Clearly, barriers still exist for women to move into higher-level positions and companies must address built-in biases to truly offer pay equality.
Jonathan Fraser Light is the managing partner at LightGabler LLP, specializing exclusively in employment law on behalf of management. He may can be reached at jlight@lightgablerlaw.com.