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The Illusion of Pay Parity and the Glass Ceiling

The primary purpose of this post is to argue that compensation shouldn’t be the primary measure of pay equity. The secondary purpose is..

The primary purpose of this post is to argue that compensation shouldn’t be the primary measure of pay equity. The secondary purpose is to suggest that the best way to break the “glass ceiling” is by defining work as a series of key performance objectives (KPOs) rather than an arbitrary list of skills, experiences, academics and generic competencies. This opens up the pool to everyone, gender aside, who can do this work including diverse and non-traditional candidates who have a different mix of experiences. For example, for this recently posted Marketing Analytics job on LinkedIn rather than saying the a person must have 5-10 years experience in marketing, social science and statistics and a BS degree OR an MS degree and only 3-5 years, it might be better to say “Figure out how to double our search engine market share using Apple’s new privacy rules. To apply, just send a summary of a major project you led that’s most comparable.”

The idea underlying this approach is that as long as the person has done something comparable, he or she should be considered a viable candidate. What the person gets paid is a different issue and one that compensation is too narrow a measure to assess parity. I came to this conclusion long ago.

During the 1990s I handled roughly two hundred search assignments for directors, controllers and VPs in financial planning and accounting mostly with mid-sized businesses. Somewhat surprisingly, given the era, almost half of these placements were with outstanding women. More interesting, about 80% of these women got promoted or took on bigger roles within the first year or two while the men didn’t fair quite as well, about 60%. I believe that part of the reason for this disparity has to do with how these women initially compared different job opportunities and how they were being paid.

While I didn’t proactively seek out outstanding woman for these roles, it just happened since I was very well connected with the major CPA firms and the male/female split seemed pretty even in this industry at the time. One of disparities I noticed that the women I met were more openminded than their male counterparts when discussing different roles and opportunities. For the women compensation wasn’t the primary criteria for exploring a role. More important to them was the industry, the actual role and projects involved, the company culture and politics, the breadth of responsibility and the career opportunity the role represented. The graphic below highlights these broader areas.

It seemed that the women whom I worked with then as a recruiter naturally looked at all of these factors in balance when comparing offers, whereas the men looked mostly at the compensation, the title and the general scope of responsibility. For the men it seemed that peer pressure and ego were the driving forces when considering whether to accept an offer or not. I had to work hard to convince them to look at the whole job and over a longer period of time, not just the start date compensation package.

Given this history, I always felt that using compensation as the sole measure to ensure gender pay parity didn’t make much sense, since there was much more to a job than just the compensation. A better approach would be some weighted average of these six factors. For example, while someone’s compensation might be 10-15% less for the same job, that same person might find the other factors more than made up for this difference. While the weighting a person assigns to each of the factors is a personal choice, the rate of compensation growth rather than the starting point should be of prime concern.

This poll on LinkedIn seems to validate this type of broader and more balanced thinking. The point of this is that when it comes to hiring people and understanding what drives job satisfaction, it’s less about the money and more about the job itself and the underlying company environment. All of this implies is that we need to rethink the role compensation plays when making offers as a means of ensuring parity. It might even mean that those who are mostly likely to succeed are those who naturally look at all of these factors before making any career decision.

When jobs are evaluated using this type of longer-term thinking, pay parity might not just be an illusion, but a mistake that drives people to make the wrong career decisions. Given a similar illusion, it’s also possible that the “glass ceiling” could be shattered the same way.