Salesforce CEO Marc Benioff announced some startling changes at Salesforce in order to rectify problems between male and female pay gaps. Excellent. Except there are some things that have not yet been addressed. 

1. Benioff said regarding pay discrepancies: "It was everywhere," Benioff admitted in a 60 Minutes interview. "It was through the whole company, every department, every division, every geography."

How does it get this way and how do you solve that?  A spokeswoman for Salesforce said, in an email to me, that they approached the pay difference as follows:

"We solve for any unexplained differences between both women and men, as well as race and ethnicity in the U.S. And if there are, we make adjustments as needed.

The wage gap is a complex problem, and there is no single cause of pay inequality. There are many variables and socio-cultural factors that play into these discrepancies that are beyond the control of one organization, department or person. What we're trying to do through our regular audits is negate these factors as best as possible.

Within a business, there is a cause of pay inequality. And that is terrible HR. Who is getting fired over this? When you hire someone, the hiring manager and HR should make sure the salary is at market rate and commensurate with the knowledge, skills, and abilities of the person being hired. If pay was unfair in "every department, every division, every geography" then that indicates a serious problem in your Human Resources department. The recruiters are failing in their job. The compensation staff is failing in their jobs. As a general rule, these departments are mostly filled with women. (I don't actually know the HR makeup at Salesforce--the spokeswoman didn't address this.)

So, who is getting fired? It sounds like it's time for a clean out in recruiting and compensation. And HR Business Partners as well. They should have caught these errors and fixed them. 

Or, is the truth of the matter that each individual person's pay is fair, it's just that men tend towards higher paid roles? In that case, if you give women raises so that the average salaries match, you'll necessarily have to overpay the women. Are you prepared for a lawsuit along those lines? In other words, unless someone is punished for this, all this is is virtue signaling--look how great we are! You're not solving the underlying problem of HR failing on the job.

The spokeswoman said that they do have a plan for preventing discrimination in the future. Here's the plan:

Equal pay is a moving target, especially for growing companies in competitive industries like ours. We are exploring ways to be more deliberate about equal pay, including:

  • New hires: As we continue to grow rapidly, we're looking at ways to create a standardized compensation system for new hires to bring everyone in at a level playing field.

  • Job Architecture: We're resetting our job architecture to ensure everyone performing similar work is categorized evenly across the entire enterprise.

  • Salary Ranges: We're reevaluating pay ranges and looking for ways to create a standardized compensation model across the company.

Fair enough. Although, I'd be interested to see what they consider similar work. When McGill University, for instance, made sure their pay was equal they said that groundskeepers were doing "similar work" to administrative assistants. That is a ridiculous case of trying to keep men and women's salaries equal. (Because men were more likely to be groundskeepers and women were more likely to be admins.) Just because a job requires similar education doesn't mean the market rate is the same. 

2. Benioff says he will refuse to hold a meeting unless 30 percent of the participants are female. How is that going to play out? If there are four people in a meeting and three are male, do you kick one out to get your balance right? Do you pull a random woman out of the hallway?

The spokeswoman clarified: 

To help elevate our high potential women at Salesforce, we have mandated that one-third of attendees must be women at executive management meetings, which are specifically meetings with our leadership team.

We put this in practice by opening up these meetings to more women--no one loses their seat at the table. Since the beginning of the program, we've consistently seen about 33% of our promotions go to women. The program is designed to level the playing field, regardless of gender.

It's great that they won't kick any men out, but if there aren't already 30 percent of women in the meeting is that because they've been blatantly discriminating (in which case, someone needs to be terminated), or because there aren't as many qualified women? 

Our statistics and goals aside, women and men make very different choices when it comes to careers. I want to make sure that the rewards come based on merit and not based on quotas.

3. The above rule is to make women more likely to get promoted. Yes, having more exposure does tend to increase your opportunity of exposure. But if male participants have to work to gain their seat at the table, and women merely have to fill a quota, doesn't that set you up for a disaster? 

The spokewoman said, "Since the beginning of the program, we've consistently seen about 33% of our promotions go to women. The program is designed to level the playing field, regardless of gender."

Leveling the playing field is great. But, when you set goals, you get people who do quotas, rather than be punished for not having the right numbers.

How will you avoid pressuring managers into promoting women just to fill the quotas rather than putting the best person in the job? And, again, how do you do this without violating federal law against gender discrimination?

No one should want to pay any two groups equally. They should want to pay them accurately. Making the numbers balance doesn't mean you're doing it legally or fairly.

Without holding people accountable for serious discrimination, this seems more like virtue signaling than actually fixing underlying issues. It's a whole lot of "look at us!" and not a whole lot of "these people screwed up." They can claim disparate impact, but that still requires people making decisions, and not all disparate impact is the result of illegal discrimination. True discrimination doesn't just happen--someone makes it happen. Let's either hold those people accountable or acknowledge that we're fixing socially acceptable problems, that don't really exist.

Published on: Jul 30, 2018