Goldman Sachs’s settlement of a long-running class action that claimed the company discriminated based on gender in pay, performance evaluations, and promotions, shows how the world has changed in recent years. And it points to how good general counsel are responding to those changes.
First, it starts with building an organization’s leadership team, and the basic proposition that we’re all different. We are the product of different cultures and backgrounds, we see and value things differently, and—here’s the important part—we frequently have an unconscious bias toward people who are similar to ourselves.
It’s normal. But it’s dangerous in the workplace unless we have the self awareness to recognize the potential for such bias to creep into our thinking, and take steps to mitigate it.
An entrepreneur pitched me for funding on a business recently, and when I pointed out that his founding team wasn’t very diverse, he proudly said he just wanted to get the very best people. When I asked him who got to define who was the “very best,” he got quiet. And when I suggested that data showed how diverse teams solved problems faster and performed better, it got quieter still.
Diverse teams are less likely to fall prey to the pitfalls of gender bias—that’s why I made it a point to build teams that were evenly split along gender lines, and that had diverse backgrounds.
Rooms full of people who look like the boss, have background like the boss, and tend to agree with the boss, might be appealing to a boss on one level—but it will leave that boss vulnerable to blind spots that come with homogeneous thinking. And they lay a foundation for discrimination and pay bias down the line. (In the Goldman Sachs case, it agreed earlier this month to settle a suit filed in 2010 that eventually covered nearly 3,000 female associates and vice presidents.)
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Second, the interview process is a minefield, and often leaders want to put candidates through a lot of interviews to get different perspectives. That’s great, particularly if the team handling interviews and screening is diverse. But do all of the people doing the interviewing actually know what sort of questions are appropriate, and which ones might go over the line?
It’s not easy to make all employees experts on employment law, and it only takes a few employees asking thoughtless questions to turn off a candidate or set pay bias in motion. I used to do lunches with recruiters and employees who did a lot of interviewing, and I’d come armed with pizza and a list of 20 interview questions I had heard over the years. We’d play, “Bad Interview Questions.”
I’d throw out questions and ask whether they’re appropriate: “How much are you making at your current job?”
“What a gorgeous ring that is, how long have you been married?”
“Do you have kids?”
“I went to Duke too … what year did you graduate?”
“Do you have any pets?”
The game would always generate some good debate about what you could talk about during an interview, and raise awareness about practices that might unintentionally get you and your company in hot water.
Third, I’ve really soured on negotiating salaries over the years. It’s well documented that men are more aggressive in negotiating their pay, and if you go down that road, you’ll likely end up with pay equity issues from the moment your new employee starts. When setting a salary range for a new position, recognize that in some cities and states, you’ll have to post the salary range up front, and in a world where your workforce may come from, or work, anywhere, your position may be covered whether you actually have an office in that state or not. Your best bet—just gather salary data (salary benchmarking sites like Pave can help you get data for free), look at the salary data from others in your company, decide how much someone in a particular position should be paid, then stick to that number.
Fourth, starting men and women on equal pay footing is only the beginning. Performance evaluations are subject to the same kind of unconscious bias as hiring, and those evaluations are often tied to salary increases and bonuses. Do a first cut of performance evaluations, then sit together as a leadership team and examine them. After giving everyone the opportunity to weigh in on each other’s evaluation, look to see how your results break down along lines of gender and race.
If your high performers skew toward one gender or race, for example, take a hard look at the employees, and yourselves, and ask the hard question: Are these really the right results, or is some unconscious bias at work? You might make some adjustments, or keep things the same. But understand that if your evaluations, pay increases, and promotions aren’t evenly dispersed over time, your pay numbers will begin to show a widening disparity that may, or may not, stand up to tough examination down the line.
And it could cost you millions.
Rob Chesnut is the former general counsel and chief ethics officer at Airbnb. He spent more than a decade as a Justice Department prosecutor and later oversaw US legal operations at eBay. The author of “Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution,” Rob consults on legal and ethical issues.
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