Is There Equity in How You Pay People?

Equity in compensation—it’s one of those feel-good terms that sounds like it belongs on a motivational poster, right next to an image of cute kittens of different colors. But when it comes down to it, you and I both know that achieving true equity for women and people of color is under assault right now. Anytime companies are trying to convince you that MEI is a fair replacement for DEI you know we have an uphill struggle on our hands. 

“We’re not in a moment where you can get rid of all these [DEI] policies and hope they will continue. As soon as you remove these things, people go back to hiring people that look like them,” says Lisa Simon, chief economist at Revelio Labs, in a recent Fortune article on the topic. That same article identifies MEI as the new policy that critics of corporate diversity, equity, and inclusion (DEI) initiatives are latching onto and defining it as “merit, excellence, and intelligence.”

Just because one acronym rhymes with another doesn’t make them similar. Don’t fall for the okie doke!

I do not have enough hours in the day to talk about how far back MEI pushes the issue of equity in the workplace. My focus today is to offer strategies that help those of you lucky souls responsible for making sure your organization’s compensation and advancement programs are indeed equitable. You’re not going to find anything new here, but perhaps just a refresher is needed to forge ahead in the face of the backlash you may be facing in your respective corporate corridors.

Pay equity audits are like the X-ray that reveals the hidden fractures in your organization’s pay structure.

Here’s how you can continue to fight the good fight:

Implement Data-Driven Pay Equity Audits

You’ve got to ALWAYS focus on the green (as in money) if you want to drive true change. Which means you’ve got to know your numbers. Pay equity audits are like the X-ray that reveals the hidden fractures in your organization’s pay structure. (Like the Italian paramedics told me my foot was just sprained, and I believed them until I returned to the States and an X-ray revealed the broken bone … but that’s a different topic!) 

These audits use advanced analytics and even AI to sniff out disparities that could otherwise stay buried under layers of company policy. And these disparities are real: Women, on average, are still earning about 82 cents for every dollar that white men make, and the gap widens for women of color. Black women earn 66% of what white men do and Latina women, just 57 cents for every dollar earned by white men (according to the 2022 Census and National Women’s Law Center). These dismal numbers are still a big OUCH. 

MEI probably isn’t concerned with how to fix these gaps. But by regularly conducting these audits, you’re not just crunching numbers—you’re setting the stage for systemic change. Collaborate with your HR and finance folks to ensure these audits are routine, transparent, and action-oriented. This isn’t about pointing fingers. It’s about fostering a culture where every paycheck reflects your company’s values of fairness and equity.

This isn’t just about setting up a mentorship program or an employee resource or business group and calling it a day.

Build Inclusive Promotion Pathways

Does your company’s promotion’s strategy feel like a scene out of Willy Wonka’s Chocolate Factory? You know, where promotions feel like a mystery lottery where only a few golden tickets ever get handed out? Not exactly inspiring, right? To level the playing field, you need to create clear and inclusive promotion pathways that everyone can follow. This isn’t just about setting up a mentorship program or an employee resource or business group and calling it a day. It’s about actively engaging with your HR business partners and other talent management to create pathways where career growth isn’t dependent on who you know or how much you can schmooze during office happy hour.

During your company’s high-potential meetings, are you speaking up and using your voice to advocate for folks who may be flying under the radar? If you aren’t being an intentional leader and speaking up in those rooms, shame on you, especially as a woman of color. You are the first line of defense, and we need you in there being vocal, like a Verizon commercial: “Can you hear me NOW?”

According to McKinsey, companies with more diverse leadership teams outperform their less diverse peers by up to 36% in profitability. That’s not just good; that’s game-changing. Use your data to support you.

Adopt Equity-Focused Pay Models

Look, nothing says “We value you” like fair pay and clear, transparent compensation models. The days of backroom bonus deals and hush-hush salary discussions need to go the way of the fax machine. Structured salary bands and standardized bonus criteria aren’t just bureaucratic red tape. They’re the bedrock of equitable compensation.

People want to know if they’re being paid as equitably as possible compared to the person doing the same job three workstations away. Transparency helps with that. In 2023, a Forbes’ study found that the majority of Millennials (76%), Gen Zers (74%) and Gen Xers (66%) are willing to discuss their salary with a coworker, compared to just 41% of Baby Boomers. Does a discussion among peers make you cringe? If so, chances are you aren't paying your employees equitably. Hopefully as Millennials, GenZers, and GenXers get more involved in policy discussions, there will be more transparent compensation models. This is important because, according to a WorldatWork survey, employees who understand their organization’s pay philosophy are 20% more engaged. 

Who wouldn’t want a more engaged workforce? 

Establish clear channels for employees to ask questions or voice concerns about pay. Make it known that your organization stands by its commitment to equity, not just in words but in dollars and cents.

So, I have to ask you, is there equity in your compensation and advancement programs? If your answer is “I’m not sure,” it’s time for you to dig deeper and get to work, sis. Because when every employee feels valued, rewarded, and seen, your entire organization thrives. Equity shouldn’t be just a goal. It should be your game plan.

Remember, always be intentional!

Level Up with Grace is an award-winning newsletter created and designed for African-American women in corporate America (and others) who want to unapologetically create and maintain a stellar career. Executive coach Cheryl Grace shares a curated collection of insights, strategies, and tactics on change management, conflict resolution, and professional development to help women excel and advance to their next level, regardless of where they are in their career journey. Please subscribe and share!

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