Talk to CEOs in any industry, and you won’t find one who is not firmly committed to pay equality in principle. What could be more obviously right and fair than giving men and women equal pay for the same work? Assuring pay equality in everyday practice can be another matter, however. It gets complicated, even with the best intentions.
There are all kinds of factors to be considered in any accurate measurement of work and compensation. In larger companies especially, it’s not always just a question of matching job titles to pay scales. To really get things right, you have to take account as well of differing areas of responsibility, the various business units involved, the cost of living in different regions, and not merely base pay but also total compensation.
SAP, where I work, is a very large company, and it wouldn’t be hard to confuse the goal of pay equality with the reality.Last week, we announced publicly that here in the U.S., we decided to examine our pay practices in detail, and to engage an independent third party to help us conduct an analysis of the compensation of thousands of our employees in the United States.
Every applicable law and best practice was applied. And the third party was an international law firm specializing in labor and employment law – in fact, the largest such firm in the world.
We were confident at SAP that our record was solid, our practices consistent with our values. But we also knew that confidence is not the same as knowledge. We wanted confirmation of our pay equality, and now we know for sure that our assumptions were correct.
It turned out that of all employees in statistically relevant job categories, men and women at our company are paid equally in more than 99 percent of cases. But 99 percent isn’t 100 percent and that wasn’t good enough for us.
We solved the problem immediately by increasing the compensation of the few employees who remained – roughly 70 percent women and 30 percent men.
We know better, too, than to file this analysis away and check off pay equality as a task completed. As with the goals of building a diverse workforce and a culture of inclusion, it has to remain an ongoing commitment, requiring systematic attention, measurement, and transparency.
At any good company, commitments like this will involve rigorous self-examination. And we at SAP in the U.S. are not the only large company to have taken on that challenge. It’s truly a trend for the better that so many companies are closely assessing their own practices and demanding more of themselves. As others follow that example, they will find that here, too, leaning into business challenges brings reward.
For the company I serve, fairness in pay is only the most visible reward. Equal pay, after all, comes down to equal respect. And when that’s the spirit of a company – when every employee can rightly feel respected and valued – the result is an enterprise in every way better and stronger.