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Breaking Down the Gender Equity Pay Adjustments at Salesforce...

Salesforce just made a move to provide pay equity increases across its workforce to eliminate any and all gender pay issues, job by job.

Here's a rundown of what just happened at Salesforce from the Atlantic:

"In a panel at a conference organized by Fortune last week, Marc Benioff, the CEO of the cloud-based software company Salesforce, said that he recently ordered a review of all 17,000 Salesforce-ceo-marc-benioff employees’ salaries to see if female employees’ pay was in line with those of male employees doing similar jobs. According to Fortune, Benioff said that the company is spending about $3 million extra this year on its payroll to make these adjustments. “We can say we pay women the same that we pay men,” he said the conference. “We looked at every single salary.”

What prompted this review was the allegation, made earlier this summer by Salesforce employees Cindy Robbins and Leyla Seka, that women at the company likely weren’t being paid as much as men. Benioff said he was initially skeptical, but commissioned an internal review anyway. Data on the compensation of employees in all departments at all levels of tenure apparently revealed Robbins and Seka’s suspicions to be warranted.

Salesforce has declined to clarify the $3 million figure or provide further details—the size of the average adjustment, how many employees saw their salaries changed, and how they reacted—but is going to put out a report with more information next year."

So Salesforce won't break it down further, but that's why you have me.  So let's break it down.

First, the easy math - if all 17,000 employees got an adjustment and 3M was spread out among them, that would be an average adjustment of $176.

Of course, that's not the right math. Assume half of those employees are female, and that brings the average adjustment to $353.

But wait, the article from the Atlantic lets us know that Salesforce is only 30% female, so that means 5,100 female employees splitting 3M for an average of $588.

What's all that mean?  Well, if the analysis was full, complete and accurate - and we have no reason to believe it wasn't based on the reputation of Salesforce - it means they didn't have much of an issue with gender pay equity.  Also, we know that things like this are never spread evenly - there were undoubtedly pockets in Salesforce that didn't look great, and female employees within those pockets got the majority of the adjustments, much higher than the average cited in the last example above.

Activists are still likely to be skeptic, but it's refreshing to see Salesforce take a run at this and then give an overall number for the adjustments they gave to eliminate pay equity across gender.

What say you? Do you believe the numbers and that Salesforce is all good as a result?

Comments

Chad Atwell

Quite a few Compensation/HR teams across California are going through internal/gender equity analysis due to the recent passage of SB 358 (Fair Pay Act). Tougher penalties and new requirements for record keeping. I'm sure there will be other bills like this in other states, so a lot more of this approach to come. Still, Benioff should be commended for emphasizing the importance of the topic to his organization.

http://www.latimes.com/local/political/la-me-pc-gov-brown-equal-pay-bill-20151006-story.html

Matt Landrum

interesting...
Good pre-emptive move or slippery slope?
I don't know.

--MattL

Kerry Leidich

The EVP HR says that the $3M is going to women and some men. There may have been other internal equity issues involved as well (e.g., age, geo). Anyway, it seems strange that HR leaders at a company like Salesforce were not already all over this. HR as a profession should get its collective sh*t together and lead on this issue rather than getting dragged along.

AC Longino

It would be interesting to know the statistics that typically affect pay at Salesforce.
Were the men more likely to negotiate harder for more money when being hired? Do the men on average have more experience? More education? I've yet to meet an HR pro who pays someone more or less based on gender for something like this. Just like anything else, I doubt the one factor of gender created the difference. In fact, I'm certain gender had noting to do with it.

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