Thursday, July 19

Gender pay gap: a blunt instrument is better than no instrument

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Obsessing about what’s right obscures the real issue

Measuring the “right” things is talked about in almost every company. Unless we agree with what and how something has been measured we howl “this is too subjective” and then refute some of the core findings. The rush to meet the 4th April deadline for UK companies to report on their gender pay gap is a case in point.

Criticism has come in from many quarters that the measures created an unnecessary burden on employers and failed to measure enough of the right things other than what we already knew – gender pay inequality exists.

If you look a little deeper then there are findings which are valuable and actionable:

  • The headline is that men are paid on average 9.9 per cent more than women but with significant disparity between companies and industries. Some companies like Google were quick to claim that none existed and others like HSBC, which has claimed equal opportunity as a core value, emerged as one of the worst offenders.
  • The trend in closing the gap is currently slow with pay parity only by 2048 unless something changes.
  • Interestingly, some reports demonstrated a poor understanding of statistics with 38 companies reporting no difference between median and average pay, something that is statistically highly unlikely.

It has to be said the figures are pretty depressing, but what these figures will do is put pressure on companies to action in change in a way that has not been done before. There is a very good chance that a significant improvement in pay parity will be achieved a long time before 2048 – so even if on reflection the initiative could have been delivered better it has gone further to establish change than many.

So wrong it’s right

The debate illustrates one of the key problems with measurement in business. Almost all measures other than those on the balance sheet, can be subject to debate and accusations of subjectivity.

This is particularly acute in customer experience. I’ve used all sorts of measures in my time – various types of customer satisfaction scale and, of course, Net Promoter Score – and the only conclusion I can come to is that none of them predict with absolute certainty how customers will behave.

But even if accurate prediction is impossible, correlation can give you some clues about likely customer behaviour. This is both the flaw and the virtue of Net Promoter Score: Frederick Reichheld’s research correlated high NPS with high financial performance but that doesn’t mean that in all circumstances you can generate the same increase in performance simply by raising NPS. However, the correlation indicates a general tendency for high NPS companies to do well, so if your NPS is lower than your peer group’s score it indicates there’s something you need to pay attention to and you need to drill down into the root causes of customer reluctance to promote your company.

Accountability

This is like gender pay gap reporting. Any company with a gender pay gap will appear to be under-rewarding female employees but a drill-down in to the reasons why will expose the factors that cause this. Some – such as the likelihood of women to take more career breaks for childcare – may be seen to be outside the company’s control, but the link between this factor and the disparity in pay should force the debate about what the company could do to, for example, to make it easier for anyone returning from a career break to make the same, or improved contribution that they made before the break, and to ensure that it was rewarded fairly.

Whether you are talking about gender pay gaps or the gap in your customers’ experience, the essential thing is to have people accountable for the changes in what the organisation does and the improvement in the associated measures.

In the customer experience world, I have seen too many organisations where the customer experience leads have the responsibility for the measures, but insufficient accountability – whether shared or individual – exists for their improvement.

It’s wrong that women should be paid less than men for the same job. It’s wrong that people should not be seeing year on year improvements in customer experience. Both are fixed by adopting measures and clear accountability.

 

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About Author

Business strategist, consultant and change manager who helps companies become genuinely customer-centric. Nick delivers customer-driven business transformation projects and has worked across many industries including banking and finance, insurance, telecommunications, industrial and public sector. Has held senior roles with variety of blue chip names including BT, Royal Bank of Scotland, CSC and Sema Group. Currently Head of Delivery at NextTen Innovation Solutions

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