By Tim Newnham - HR.com
This article is part of a 3-piece series titled “Moving Business Beyond Bias” focused on how SAP SuccessFactors is using technology to create equity in the workplace. The series covers the state of equity in the workplace, how HR is positioned to provide the next big competitive advantage, and how you can use technology to rid bias from people-based decisions. In this second piece, we share insights into how equitable workplaces are putting HR squarely in the hot seat as the people who can drive meaningful change for business continuity. If you missed the first article covering the state of equity in the workplace it can be found here.
We mentioned previously that CEOs feel diversity and inclusion are being addressed. We also know the evidence is overwhelmingly against them.
Just looking at how people are rewarded for their work:
- A gender pay gap continues to exist in many parts of the world: see report
- There is evidence of a racial as well as LGBT pay gap in some industries:
Looking at representation in leadership:
- Under 7 percent of Fortune 500 CEOs are currently women, and this is actually an all time high for female representation at that level:
SAP SuccessFactors offers a solution that provides benchmarking out of the box, across hundreds of metrics, allowing companies to easily compare their own workforce to those in a variety of industries, locations, company sizes, revenue, and income groups across the globe. SAP leveraged this long-standing functionality to determine whether the gender composition of the workforce has changed meaningfully over the past three years, in line with the increased attention the topic has received from business leaders. What they found was a bit alarming:
- Female representation in organizations across the globe has remained steady – and rather unequal. Nearly 75 percent of companies employ a greater number of males than females, with the 10 percent of companies that are the least gender diverse employing four to five men for every woman. While compelling, this inequity does not fully explain the inequity we see in management: well over 75 percent of companies in our sample employ more male managers than females, and the 10 percent of least diverse companies have six male managers for every female manager (a number that is trending upward, not down). Simply put, despite the increased profile of the topic in recent years, the least diverse companies are just getting less diverse, especially when it comes to their leadership teams.
But here is the thing: CEOs are experts in executing on company strategy and driving profitability. This is a workforce issue and as such the workforce experts are the ones to drive the change.
HR’s new role in ensuring D&I are addressed
According to Patti, we have a “Rules without Tools” problem – it is at best a policy or best practice, but the mechanisms for enabling it are out of date and represent a different reality.
In Gabby’s recent blog ”HR Best Practices or HR Biased Practices?” she points out that traditional HR processes — things like merit increases, annual performance reviews, or the nine-box grid for succession planning haven’t changed in decades, and continue not to change simply because, well, they continue not to change. She goes on to say that the problem with many of these best practice methods is they were designed for a workforce that looked different in the past than it does today. Decades ago the workforce was much more homogenous than it is now with significantly fewer women, minorities, and older workers.
- There are key decision points that tend to favor majority status employees over the underrepresented ones. But it can be difficult to create change in these processes, especially when we’ve done them a certain way for so long. Take, for instance, the extremely common practice of awarding merit-based raises and bonuses that are a percentage of an employee’s current salary. This practice makes a lot of sense. After all, we want to motivate employees to perform well in a way that effectively rewards their contributions and encourages them to strive for more. Where it doesn’t make sense is in the real world, where salary gaps continue to exist between men and women, and between white employees and those of different races and ethnicities. Those who start out with higher salaries are going to see greater rewards, and more importantly, they’re going to grow that salary at a faster rate because of their initial advantage, perpetuating the gap to an even greater extent over time.
- Consider also the example of employee self-assessments as part of the performance evaluation cycle. For a long time we’ve used self-assessments as a way of giving employees voice in the process, allowing them to make the case for the performance rating they feel they deserve. The problem is research has shown that women tend to underrate themselves in an effort to appear humble and cooperative, and these lower self-ratings influence how their manager then evaluates their performance. And yet we continue to encourage employees to rate themselves and share these ratings with their manager. In an effort to be fair in our performance management practices we are unknowingly creating a further obstacle for women seeking to grow their careers.
As HR seeks to drive more strategic value and administrative tasks are increasingly automated, diversity and inclusion is the big strategic challenge that will get – and keep – HR in the role of providing bottom-line competitive advantage to their organization.
In the third piece, we delve into how technology can be used to change how people decisions are made in a new normal of equitable practices.You can read this here.
