Equal pay
When we look back to 2020, the coronavirus pandemic will loom large. Not just because of the pandemic itself, dreadful though that has proven to be, but also because of the effect it had on so many other areas of life. Unemployment rose, businesses folded, health problems escalated, online lives proved both isolating and demanding, the arts faced multiple disasters, and all the while the major digital companies grew rapidly, as did the incomes of their senior executives, increasing the already alarming income disparity between the rich and the rest (the Gini Index).
Among all these concerns, incomes are central. The year has seen a culmination of what, over sixty years, has been decades of little progress on how people are rewarded for what they do, especially in some sectors of work, and in pay rate comparisons between men and women. To be honest, I can’t believe we are still having to talk about pay equality for women: it should have been resolved years ago, but it’s still an embarrassing, yawning gap. It makes me angry.
In case we had forgotten, just recently Anna Louie Sussman wrote an excellent article on eliminating pay discrimination against women and the importance of pay equity. [i] As she comments, there is a “seemingly intractable gender pay gap”, pointing out the issue is not equal pay for men and women performing the same job (although that is still an issue), but the deeper discrimination that puts some areas of employment into an area that is loosely described as ‘women’s work’, resulting in lower rates of remuneration. Why can’t we get this sorted?
Sussman provides an excellent overview, especially when she goes on to looking at recent initiatives in New Zealand, where there’s evidence of a more sophisticated approach to job evaluation methodologies. She reports on a very telling example, social work, where a review group including “union officials, delegates from the Ministry of Children, social workers and employer representatives undertook a comprehensive assessment process to build a richer understanding of the social worker’s role. In dwelling on parts of the job that are often overlooked — the emotional demands, the problem-solving, the physical danger — many at the table were surprised at its difficulty and complexity. Even articulating the role’s various demands and skills posed a challenge.” The task was revealing, especially as it showed that some skills, especially emotional ones, were consistently ignored in assessing a work role. One step forward was when they eventually agreed social workers needed “emotional dexterity”.
The approach adopted in New Zealand was to use comparisons to assist in determining pay equity. Various comparable male-dominated occupations were identified, and the working groups agreed they should do so by establishing a set of agreed criteria, “that these jobs should be at least 66 percent male, have a collective bargaining agreement and also be public sector jobs”. Eventually they chose four occupations that were potentially comparable to elements of social work. These were detectives and family violence constables, both in the New Zealand police force, engineers employed by the Auckland City Council, and air traffic controllers for Airways New Zealand. Sussman noted all four required alertness and focus, high on sensory demands, while they varied widely in the degree of physical effort or emotional skills involved.
More detailed analysis led to each component of the job being allocated a rating, which formed the basis for negotiating the social workers’ pay. “The final settlement included an average 30.6 percent pay increase, phased in over two years [It was] a higher figure than the union had historically promoted — and a powerful argument for going through the job evaluation process with the goal of eliminating gender-based undervaluation, rather than targeting a specific pay hike.” Furthermore, many social workers said they found the work analysis more valuable than the pay raise itself, being seen as skilled professionals for the first time. [ii] A win, twice over.
In her article, Sussman gives a helpful overview of the history of attempts to ensure equal pay rates for women, beginning with equal pay legislation internationally, and especially I.L.O.’s Equal Remuneration Convention of 1953, which has been ratified by 173 member countries. Oh dear, in case you didn’t know it seems the United States is one of the holdouts.
Despite this, moves for pay equality were strong in the US in the 1970s and 1980s, and then they foundered. Why? In 1985 a ruling in the Ninth U.S. Circuit Court of Appeals overturned a judgment by a Federal District Court that would have given female Washington state employees substantial raises based on a pay equity study. Judge Anthony Kennedy, (yes he’s the one who was later to be appointed to the Supreme Court), wrote an opinion arguing the Washington state pay equity plan required the state to “eliminate an economic inequality that it did not create,” and saw this as interfering with that wonderful thing, the ‘free market for labour’. Other decisions by conservative judges, and the broader acceptance of free-market thought, stopped momentum.
Today, that wide and seemingly intractable gender gap is still in place. As I see it, there are three issues at stake, of which job evaluation, the critical process undertaken in New Zealand, is one. I will leave to one side a fourth issue, legal remedies, which are also important, but while legal remedies do establish a principle, they seldom explain how that principle is to be put into practice. Just remember the history of the appalling mess over racial discrimination in schools: plenty of principles established, yet plenty of problems about application in practice.
Job evaluation has a long history, and the dominant system for job evaluation was developed by the Hay group after the Second World War. Now part of Korn Ferry, the executive head-hunting business, its proprietary system, the ‘point factor job evaluation system’, assesses three factors. These are know-how, problem solving and accountability. Within each of these there are more specific attributes. Know-how includes practical and technical knowledge, planning and organising skills, and accountability. Students of classical management theory will immediately recognise these are the key elements of ‘ploc’ management: ‘ploc’ is an acronym for planning, leading, organising and controlling. I should emphasise the work ‘classical’ in describing this as a management theory: it is an old-fashioned, male-dominated view of management, instrumental and impersonal. If that wasn’t clear, then the breakdown of the second dimension, problem solving, makes it quite clear: the two criteria here are thinking environment and thinking challenge. Clearly impersonal, this reduces job evaluation to machine management.
That leaves the third dimension, accountability. The Hay method identifies three factors here, freedom to act, magnitude and impact. Emotional and attitudinal issues are pushed into the background. In considering these factors, we need to leave the Hay method for a while, and take a look at the second issue impacting on pay equity, which is ‘discretion’. The importance of discretion was identified in research by Elliot Jaques, a Canadian social scientists and management consultant, who carried out the bulk of his most important work in the UK. He had been asked to develop a worker participation plan for Britain’s Glacier Metal Company, in order to establish a basis for thinking about remuneration and responsibility. His analysis was sparked by a simple question: was there any importance to the familiar approach that the salary of lower-level workers was estimated on hourly, daily or weekly basis, while salary of executives was calculated as annual amount. This led him to explore the ‘time span of discretion’. [iii] Put simply, Jaques argued an employee’s place in the corporate hierarchy can be determined by the amount of time that he or she is given to reach a goal without supervision. The longer the time, the higher employees believe their pay should be. Actually, the more he or she should be paid.
Jaques’ approach offers a quite distinct approach to pay equity. Like any innovative rethinking, it took him years to flesh out his approach into a systematic process. However, from the beginning, he had argued it was supervision – or freedom from supervision – that was the critical factor. Continuing his research in the US, he eventually concluded that most of the working population has been undervalued and underpaid.. A 19985 interview revealed his claim “ no more than a quarter of the labor pool should be classified as skilled or semiskilled. He says a full 50 percent are capable of a three-month-to-one-year time span without supervision on a task, and thus should be classified as first- level managers. He says 20 percent can handle one-to-two year time span slots, such as department head; 3 to 4 percent could take on two-to-five-year slots, such as general manager; 1 percent are capable of five-to-ten year slots, such as division president, and a handful of people can handle time spans of 10 to 20 or more than 20 years – respectively, executive vice presidents and corporate chiefs.” [iv] There was a catch, which he acknowledged: not all organisations are like businesses. Jaques developed separate strands of his theory to deal with churches and universities. As Rasky noted. “The reason: priests are not held accountable for the actions of their parishioners, nor are professors held accountable for their students’ performance, so concepts of supervision do not apply.” I wonder about that?
His approach was radical. Not radical in suggesting the time span of discretion was important and should be measured, but in suggesting that this was the only key criterion is assessing pay equity. Of course, the Hay system does include freedom to act, but combines this with both the magnitude and impact of decisions, as well as the two other dimensions of know-how and problem solving. Jaques approach sweeps away the complexity of the Hay system: it is more focussed. His work had impressed me, just as I was starting working at Shell. Back then Shell used the Hay system: Hay wasn’t just complex, it was riddled with arguments and the exercise of political influence. The end of a job evaluation process was like being at the end of a boxing match: we would all retire, bloodied but proud to have won some points, knowing that soon we would be back to battle over another new position or a request to review an existing role.
Jaques might have been a management consultant, but at heart he was an academic. If his ideas have received relatively little attention, the major reason lies with Jaques himself. In 1999, he established the Requisite Organization International Institute, operating as an educational and research group. With a name like that, it is far from surprising it’s hardly well known. If he had called it TSI International, interest would have been much greater (for Time Span Institute International!). Its lack of visibility is more than a little frustrating. Not only is its radical approach to pay equity hidden, but the Requisite Organization has carried out other largely invisible but far sighted work, with a focus on ‘triple bottom line’ objectives for organisations: outcomes focussed on securing its people and preserving the environment as well as ensuring profit. [v] Though it is not as well-known as it should be, it has carried out work with many organisations, and was awarded the Joint Staff Certificate of Appreciation by General Colin Powell, on behalf of the Joint Chiefs of Staff of the US Armed Forces. Surprised? You shouldn’t be. Time after time it is the military that demonstrates more forward looking approach to leadership and management than is shown by most commercial organisations.
I said there are three issue central to the pay equality debate. Sussman focussed on job evaluation. Now I have added the importance of the time span of responsibility. The third has to do with what we define as work. It has long been a criticism of the Hay approach that it has an embedded gender bias. The system perpetuates gender-based occupational assumptions, stemming from its origins in the 1940s and 1950s, but it also conceals these assumptions under a language of apparent gender neutrality. The Hay system consistently values male-dominated management functions over non-management functions more likely to be performed by women. If pay equality is to address relevant comparisons between activities, the scope of what is examined has to be rethought. Did I mention I really don’t like the Hay system? Its approach privileges linear logic over creativity, mathematical skills over language skills, and so much more. As I noted earlier, Sussman’s case study of social workers revealed some skills, especially emotional ones, were consistently ignored in assessing a work role. We have come a long way since the instrumental view of work in the 1950’s, and much of this has been significantly influenced by a better understanding of emotional intelligence and emotional dexterity.
Many small steps in the right direction, but little progress. For that, perhaps, we might have to thank economists! If you studied basic economics at some point, you will remember the theory that prices, and hence wages, are determined at the point where a supply curve and a demand curve intersect. Let’s imagine you want a data analyst, with experience on working with large data sets and a track record in banking applications: there are few people like that, so supply is low, and, in the current environment where ‘big data’ is big, demand is high. Up go salaries. Ah for the wonderful world of economics, where financial rationality rules supreme. Out there in the ‘real world’ factors ranging from social values and beliefs about the relative value of work (remember, housework isn’t seen as real work), all the way to the power of monopolies make supply and demand curves evidence of theory overstepping any sense of what really takes place.
I sometimes talk to people close to retiring, a term used to describe ‘stopping working’. How odd. We all work, all the time, whether it is a blogger at a keyboard, an adult cleaning up after a family breakfast, or an employee in an office. Equal pay is usually linked to situations where you work for someone else, unless that person is your partner, of course! Only work that is paid for is part of the economic system. Only work that is paid for gives social and economic status. No wonder many women feel unappreciated, undervalued or ignored. It’s a rotten system.
[i] How to End ‘Women’s Work, by Anna Louie Sussman, New York Times, November 13, 2020
[ii] Ibid
[iii] Time-Span Handbook: the Use of Time-Span of Discretion to Measure the Level of Work in Employment Roles and to Arrange an Equitable Payment Structure, London, Heinemann, 1964
[iv] Corporate Psychologist: Elliot Jaques, by Susan F Rasky, New York Times, February 17, 1985
[v] See www.requisite.org
