INSUBCONTINENT EXCLUSIVE:
Pay consultants and lawyers say companies are doing pay audits after pressure from activist shareholders.More and more companies are making
broad pay adjustments after taking deep dives into worker pay data
They are auditing their payrolls for gaps between men's and women's pay, tweaking salaries that aren't competitive with other companies
and making changes to compensation programs to help prevent potential bias.Yet the evaluations also carry risks for employers -- raising
questions about unfair pay practices in the past, misconceptions about the adjustments or budget pressures as they fix inequalities they
discover.Nike became the latest example this week when it said in a memo to employees that the company would adjust the pay of about 10 per
cent of its 74,000 workers and revamp its bonus system, noting its compensation program is designed to "support a culture in which employees
feel included and empowered." The new bonus system, while still taking into account the performance of individuals, will be based on company
performance and targets and reward people more consistently across different geographies or corporate roles -- which could have the effect
of reducing disparities or potential bias.The move followed a "deeper analysis" of its pay system this year that came amid publicized
complaints by women at Nike about inappropriate workplace behavior and a toxic boys' club culture
Nike spokesman Greg Rossiter told The Washington Post that the pay adjustments were about "ensuring Nike is competitive across all levels,
geographies, functions and brands," addressing external competitive realities
He cited Nike data that show there is virtually no gap between men's and women's pay and said "we continue to monitor the data and
adjust where appropriate, with 1:1 as our goal."A growing number of other companies have announced pay adjustments to address pay equity
Salesforce CEO Marc Benioff has said the cloud computing giant made two $3 million investments to fix pay differences that were discovered
A Cisco Systems human resources executive said in 2017 that it had adjusted pay for 2 per cent of its employees after an audit
Corning now does pay analyses three to four times a year after it discovered a slight gap between the pay of male and female workers, and
has made pay changes and shifted practices in response.Meanwhile, Citigroup said this year it would make adjustments to help close gaps
between women and United States minorities after finding women are paid, on average, 99 per cent of what men are paid
And Google said in March that it increased compensation for 228 "Googlers" that worked in job groups where it found "statistically
significant pay differences."Pay consultants and lawyers say companies are doing pay audits after pressure from activist shareholders,
changes to state laws and a growing focus on the issue by the public
Some also simply want to even out compensation gaps."A lot of what's driving it is social consciousness, and the media attention that's
on this topic," said Cheryl Pinarchick, a partner at the law firm Fisher Philips in Boston who has seen a big uptick of pay audits and
adjustments in the past two years.Natasha Lamb, a managing partner with Arjuna Capital, has pushed nearly two dozen companies in the
finance, retail and technology industries to disclose their pay gap figures and commit to re-analyze them each year
She said Arjuna withdrew its proposal at Nike in April 2017 after the company pledged to release its numbers; Nike said in March that women
were paid 99.6 per cent of male employees' pay in 2016
That number was 99.9 per cent in 2017, Rossiter said.Lamb said she presumes many of the companies Arjuna targets make pay adjustments
between when her proposal is received and when they disclose their number."We want them to publish the number, and if they need time to make
some adjustments internally, that's great," she said
We want salaries to be equitable."(Nike's Rossiter did not respond to a question about whether adjustments were made after Arjuna's
proposal, but said "we always welcome conversations with our shareholders on a variety of matters, including those relating to pay
practices.")Meanwhile, a number of states have updated or passed new pay equity laws, banning employers from asking about salary history,
ensuring workers can ask one another about pay or broadening how companies should think about the issue
The state laws, said Gail Greenfield, a principal at the human resources consulting firm Mercer, are "a fairly major change," and "I don't
see that that's going to dissipate."But even as companies are doing more pay audits, the practice creates tension for companies
Some may not be sure they have the budget to close any gaps that are found
Others may be hesitant to do the analyses because discovering -- and then acknowledging -- unfair pay in the past could present legal risks
A couple of states, Massachusetts and Oregon, have even put in place protections for employers who evaluate their pay and can show they're
working to correct any problems, Pinarchick said.As a result, many companies that do the audits don't say much about them."You're not
hearing from too many companies publicly talking about pay equity," Greenfield said
While some have acknowledged disparities, what many do is roll the adjustments into a merit pay raise, she said
"If someone usually would have gotten a 3 per cent raise, maybe this year it's 6 per cent."Pinarchick agreed, saying others use phrases
such as "internal benchmarking or external benchmarking
They're talking about fairness, they're talking about 'updating compensation policies.' They're not coming out and saying 'we found a
problem and we're fixing it.'Corning senior vice president of human resources Christine Pambianchi said she did not worry about those risks
when the company embarked on its effort to close its small gender pay gap because they routinely analyze pay and were transparent about
human resources practices with employees
After finding in 2013 that women made 99.2 per cent of what male employees earned -- the company now reports zero pay gap -- Corning began
working with Mercer and not only made salary adjustments but went hunting for what might explain the small gap.They found two likely reasons
One was asking about salary history on job applications, a practice it has since ended
Another was to rethink how Corning considers the promotion of administrative and technical workers, which are predominantly women at
Corning, into professional-level jobs
Rather than treating them as a regular internal promotion with an average bump in pay, they began treating them as an outside hire, offering
much larger corresponding raises when employees made that professional leap.Arjuna's Lamb says such efforts to unearth root causes, or
broader changes to compensation structures, could help companies go beyond just putting a Band-aid on the problem.Employers, she said, need
to go "back to fundamentals so every year we don't need to make up these gaps."(This story has not been edited by TheIndianSubcontinent
staff and is auto-generated from a syndicated feed.)
