A multinational company employing approximately 22,000 software engineers, mostly in the U.S. and India, had a problem: In the organization as a whole, women were paid on average 33% less than men: For every dollar men made, women earned only 67 cents. But, when comparing women to men with similar job titles, skills, and company tenure, this pay gap shrank to a mere 3% — still statistically significant but practically of much less consequence.
Your Company’s Pay Gap Is About More Than Money
A framework to help you identify, measure, and address inequity.
March 31, 2021
Summary.
The authors offer a new methodology to help organizations diagnose gender inequities and point to next steps. Using this methodology, companies will be able to make evidence-based decisions about whether to invest their equity budget in, for example, anti-bias and inclusion training to remedy a culture problem or a comprehensive compensation audit to address pay discrimination. The analysis uses data in three stages — compensation, representation, and finally job satisfaction — to reveal hidden gender inequities. Similarly, the analysis could focus on racial equity instead of gender equity by examining differences between, say Black employees and white employees instead of between men and women.
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New!
HBR Learning
Diversity, Inclusion, and Belonging Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Diversity, Inclusion, and Belonging. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to build a better, more just workplace.