Last time around I wrote about pay equity because I was feeling optimistic again. I have to admit that I had gotten tired of the subject after listening to our profession talk about it for decades without any real fixes in mind. But WorldatWork's recent position statement seems like a real shake up, urging all of us to work to reduce and eliminate U.S. pay inequities with some real guidance included.
I brought up the position statement over boxed salads with a number of colleagues recently, eager to see whether it would get anyone stoked. And it did. Some were skeptical initially about the need to go public with the issue but that didn't hold up under group scrutiny. Then we kicked around the recent Massachusetts legislation (more on that in a minute) and once the professional refresh was over, settled into sharing personal experiences.
That's right. Put a group of Human Resource professionals together to talk about pay and we act like everyone else. We speed quickly through the legislative issues to talk about our own pay. We're not immune.
Once things got started, I tried to cheer everyone up by explaining that way back in the '80s, pay practices were such that I had been told by a hiring manager to accept a lower salary than I thought was competitive because I didn't have a family to support. I shared the story because I thought it would make everyone chuckle about how things had changed. The thing is, a young colleague told us she had the same experience -- with the same words communicated by a manager -- in the last couple of years.
Skeptical? Don't be. I bet that most women who are reading this have their own experiences of how an early underbid salary was explained in a startling way. But they know it goes beyond words. Start your career with an unnecessarily low salary and you will stay in the lower distribution of your pay opportunities for years, if not decades, to come. Don't forget to add lower bonuses, equity awards, retirement contributions and so on. And difficulties positioning yourself appropriately with future hiring managers who wonder why you warranted the salary you were saddled with.
There is no way that pay inequities are restricted to women. In fact, research shows that pay inequity is an equal opportunity experience for many employment categories. And, as I'm sure you've noticed and experienced, there is enough pay dissatisfaction to go around right now. But our profession is mainly women, so when the war stories start you have to expect some examples of unequal treatment.
"Anchoring" is a fundamental of behavioral economics. The concept is important to our compensation work because human beings use ". . . initial exposure to a number as a reference point that influences subsequent judgments about value. [and] The process usually occurs without our awareness . . ."
Effective July 1, 2018, employers in Massachusetts will not be able to ask job candidates about their salary history until after a job offer is made. I don't know whether the legislators had behavioral economics in mind when they drew up the legislation, but having eliminated the anchoring bias they have also raised loud complaints across the Human Resource profession.
Are you planning on having a family? Is English your first language? Just because these questions are illegal doesn't mean they aren't asked -- we all know that.
We've been happy to legislate and work to rein in improper manager behaviors. Are we willing to ask the same of ourselves?
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.