The Board of a medium-sized company needed to assess the fairness of pay between male and female employees based on some early rumblings of perceived inequity. An in-depth review was undertaken to analyse pay levels at the organisation and report back to the Board.
Initial review indicated that there was an overall gender pay imbalance present in the organisation with females on average receiving less pay than males. On the surface this was assumed to be due to the apparent higher representation of males in middle to senior management, however the pay differentials were higher than Australian and most industry comparatives. Cross analysis also indicated that some of the areas that displayed the greatest imbalance also had higher female turnover rates relative to that of the males.
In order to get to the bottom of the differentials, it was necessary to conduct a “deep dive” into the data and understand what factors were driving the overall imbalance. Analysis revealed that in the performance management process, females were being receiving equal if not slightly better ratings than males. In addition, females were also receiving slightly higher remuneration increases on average as part of the annual review process. Furthermore, the review of internal mobility showed that the promotion rate for females demonstrated again an equitable, if not slightly more favourable outcome.
The analysis then drilled down into the data to look at specific roles within the organisation in order to compare pay on a like for like basis. A clear pattern was uncovered where the great majority of female averages were lower than the male average within similar roles. In reviewing the pay through the employee life cycle, it was determined that the greatest pay discrepancies were created at hire. Several factors were ascertained to be the drivers of this dynamic, including unconscious hiring manager bias (no direct evidence of conscious bias) and differences in candidate approach during the recruitment process.
Armed with facts showing that the pay imbalance across the organisation was not due solely to representation issues, but that it was indeed a real issue, the organisation needed to act.