Yesterday was "equal pay day day" which is supposed to represent how far a woman needs to work into 2015 to make as much income as a man did in 2014. While lots of people disagree with the premise that the difference in pay is based on discrimination (the Washington Post, for instance, gives the claims "2 Pinocchios" meaning that the claim contains "significant omissions and/or exaggerations. Some factual error may be involved but not necessarily.") people want to make sure that things are fair.
Many women feel they face wage discrimination and some do face wage discrimination. Many women aren't facing gender discrimination but rather the result of their choices--but if they had better options, they'd make better choices. So, true or false, we need solutions. Here are what 5 smart people and companies are trying to do to rectify the situation.
1. No negotiation salaries. Ellen Pao (yes, that Ellen Pao) is implementing a new policy at Reddit, where she's the CEO. This will mean that salaries offers are essentially one and done, take it or leave it. (You can switch some salary for equity, but the overall total isn't changing.) Pao is making this change specifically because women don't like to negotiate and when they do, they are often judged harshly for it. By eliminating the negotiation aspect, Pao hopes to reduce the gender imbalance that can happen in salary. Because your future salaries are generally based on a percentage of your current salary, a small difference at the beginning of a career can grow into a huge difference 10 years down the road.
2. Better maternity leaves. The US lags behind other developed countries in maternity leaves--we just don't allow a lot of time off. As a result, some women leave the workforce when they'd prefer to stay working, just with a bit long leave. Vodafone is implementing a new policy that allows women to work 30 hours a week, but receive full pay for 6 months after returning from maternity leave. How does this help pay inequality? If you have to quit a job and come back later, you may well do so at a lower rate than your co-workers who worked straight through. This allows more flexibility, needed in those early baby months, without damaging the paycheck.
3. Make your salaries public. I've long since advocated for openness around salaries--gaps by gender, race, or even lack of negotiation ability is all allowed because of information asymmetry. That means that you, the job candidate, can only guess at whether or not what the company is offering you is fair. Hannah Riley Bowles, of the Harvard Kennedy School, says the same thing. If, along with your offer letter, you got a list of everyone else in the department's salary information, you could negotiate with confidence and rest assured that you weren't being cheated.
4. Make flexibility real. Harvard economist Claudia Goldin says that a lot of the wage gaps come about in professions where flexibility isn't easily granted. Since it's usually mom who wants to go to parent-teacher conferences or a soccer match, it's mom's salary that suffers. This isn't because companies are mean, it's because clients want continuity. She points out that in professions, like pharmacy, where all the patient information is stored on a computer and any pharmacist can help any patient, the wage gap is smaller. If we have better systems and more cross-training, then people can have real flexibility without the business suffering losses. Customers are happy, employees are happy, and the business stays happy.
5. Use your data. Workforce Analytics company, Visier CEO John Schwarz has found that using real-time analytics to assess employees gets you more accurate results. If you really know how your employees are performing relative to peers and base compensation around that performance, you can eliminate the human guesswork involved in evaluating employees. The result is pay that reflects performance, as well as time in position, and not gender.