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Here is how HR can help prevent the missteps that could cost your company big in court.
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Illustration by Dale Glasgow.
Everyone knows there is a gender gap in how employees are paid, though estimates vary as to how large it is. But compensation inequity of any size does more than expose an organization to litigation; it can cause disengagement and lower productivity, which can translate into lower profits.
It can also push talented employees out the door in search of greener pastures (and higher paychecks). In fact, often the smartest and most marketable employees are the first to leave. Bottom line: The gender gap is everyone’s problem.
So let’s begin with the assumption that your organization is smart and wants to eliminate this business inhibitor and legal wrong. What do you do?
1. Lawyer Up on Data Collection
Sometimes HR professionals will collect data to demonstrate that a problem exists. I understand why, but this can be dangerous.
The information likely will be discoverable, and your good-faith efforts could be used against you. If you need data to break through denial at your company, you may want to work with your employment lawyer to collect it under attorney-client privilege. Then have it delivered in the form of legal advice.
Even then, the underlying data may not be privileged if, for example, it is gathered from existing nonprivileged documents and information. However, data compilation and analysis done by—or at the direction of—counsel might still be protected from disclosure by the attorney-client privilege and/or the work product doctrine.
The bottom line is that the scope of the attorney-client privilege is deceptively complex, so give careful and thoughtful consideration to how you work with your employer’s lawyer to maximize the likelihood that the privilege will apply.
One thing is clear: Simply copying your employer’s attorney on an e-mail does not make the information within the e-mail privileged; it simply makes the attorney a witness to it.
2. Analyze Positions Qualitatively
Once you’ve documented pay gaps, don’t automatically assume they are all attributable to gender.
There may be totally legitimate business reasons for wage differences. For example, someone who took four years off to have and raise a child might earn less than someone who did not spend time away from work and who has received regular raises over that time span.
So, while quantitative data provides a starting point, a qualitative assessment of the relevant factors at play—one that ideally is also done under attorney-client privilege—is needed to determine if changes are in order.
3. Allow Negotiation …
Ellen Pao, former CEO of Reddit, tried to ban salary negotiations at her company based on the theory that allowing such bargaining inherently benefited men. Let me count the reasons I disagree with this tactic. Actually, I’ll stop at three:
First, it reinforces the stereotype that women aren’t capable negotiators.
Second, it takes away a woman’s (or a man’s) power to play a role in determining her (or his) own pay.
Third, whether and how someone negotiates may be relevant to whether you hire them. It is better than a behavioral question—it is a behavioral simulation.
4. … But Reconsider Asking About Salary History
When we ask about prior salary, we may be unwittingly perpetuating the gender gap created by prior employers. If someone was paid too little at her previous employer, the low part of your range may result in a material increase in compensation but still be less than the candidate deserves.
Consider eliminating the salary history question from your applications. After all, what does prior compensation really have to do with what someone should earn for a new opportunity? Ask only if it is truly relevant to the job—and document why you believe it is.
5. Create Pay Ranges But Recognize Exceptions
Establish pay ranges for positions to maximize consistency, and develop criteria for how you will place a new hire or promotion in the range.
But also realize that there will be times when exceptions are necessary. Develop a procedure to determine when and why you should depart from the norm, and conduct periodic audits to make sure that exceptions are not made only for men.
6. Consider Access Issues
Pay is often linked to performance. At certain levels, I think that works (at least to some degree). But I firmly believe that you cannot perform as well as your peers if you don’t have access to the same opportunities that they do. In my view, this is where many employers miss the mark, big time.
I hate unnecessary bureaucracy as much as anyone, but if there is no structure as to how work is distributed, the plum assignments too often may go to someone “just like” the manager. While slights like this are not intentional, they are often very real. Are the highly desired assignments typically meted out among the guys while playing golf or drinking at the neighborhood watering hole? If so, the boys’ club may be rearing its ugly head in a way that perpetuates the access gap and, with that, the gender gap.
Access to key assignments, customers, clients and information is essential to successful performance and the resulting link to higher pay. Of course, managers must have some discretion, but there should also be guardrails in place so that access issues don’t translate into unequal opportunity.
7. Appraise Performance Appraisals
Gender bias is often evident in performance appraisals, which are linked to pay. Two examples:
Train your leaders on these and other potential biases.
8. Be Aware of Persistent Biases and Their Effects
Yes, some of what an employee is paid is a result of his or her ability to negotiate. So workers have a major role to play, too: An employee should not complain with impunity about making less than others if he or she did not ask for more or apologizes for having done so.
Unfortunately, ambition is not always viewed as laudably in a woman as it is in a man. Sheryl Sandberg makes that point in Lean In: Women, Work, and the Will to Lead (Knopf, 2013) multiple times. Here is the sad but persistent reality: A woman may have to decide between conforming to the societally accepted stereotype of being nice (and making less money) or being liked less because she asks for what she has earned.
9. Train Your Leaders
Of course, a woman who leans in should not have to choose between being well-liked or well-paid, so educate your leaders about the unconscious biases that can come into play in cases where women negotiate no differently from men. Once people are made aware of their own prejudice, they are less likely to unconsciously engage in it.
Inevitably, some folks on the leadership team will deny that the bias exists at all because they have not personally experienced it. Let me conclude by saying this: I have never experienced labor pains. But I would be foolish to deny their existence based just on my life experience. You can take the analogy from there.
Jonathan A. Segal is a partner at Duane Morris in Philadelphia and New York City. Follow him on Twitter @Jonathan_HR_Law.
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