Wage Transparency and Equity, Part 2 (EP.74)
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Updated
February 2, 2024
In this episode, Tim Cynova and Katrina Donald delve into the complex world of wage transparency and equitable compensation, and explore how organizations can navigate these challenges to create fair and inclusive workplaces.
They explore the need for organizations to list salaries for roles, both internally and externally, as well as the implications wage transparency laws are having across the U.S. The conversation delves into the challenges faced by organizations in creating consistency and fairness in their compensation approaches, particularly when considering factors like internal versus external experience and equity. Tim and Katrina also emphasize the significance of engaging in open and honest conversations about compensation within organizations and the benefits of adopting a holistic approach to compensation.
Episode Highlights:
The growing urgency for organizations to have transparent salary information
The impact of new and expanding wage transparency laws
The challenges organizations face in creating consistency and equity in compensation
The importance of having open and honest conversations about compensation
How to consider compensation in a more holistic way, beyond just base compensation
The benefits of adopting a strict, fixed tier compensation model
Stay tuned for upcoming episodes on executive coaches who center equity and inclusion in their practice, the authors of "The In-Between: A Companion Book For Uncertain Times," and Gen Z in the workplace. Plus, catch season two of "White Men and the Journey Towards Anti-Racism" as well as an episode on values-based collective bargaining processes.
Bios
Tim Cynova, SPHR (he/him) is the Principal of Work. Shouldn’t. Suck., an HR and org design consultancy helping to reimagine workplaces where everyone can thrive. He is a certified Senior Professional in Human Resources (SPHR) and a trained mediator, and has served on the faculty of Minneapolis College of Art & Design, the Banff Centre for Arts & Creativity (Banff, Canada) and The New School (New York City) teaching courses in People-Centric Organizational Design, and Strategic HR. In 2021, he concluded a 12-year tenure leading Fractured Atlas, a $30M, entirely virtual non-profit technology company and the largest association of independent artists in the U.S., where he served in both the Chief Operating Officer and Co-CEO roles (part of a four-person, shared, non-hierarchical leadership team), and was deeply involved in its work to become an anti-racist, anti-oppressive organization since they made that commitment in 2013. Earlier in his career, Tim was the Executive Director of The Parsons Dance Company and of High 5 Tickets to the Arts in New York City, had a memorable stint with the Cincinnati Symphony Orchestra, was a one-time classical trombonist, musicologist, and for five years in his youth he delivered newspapers for the Evansville, Indiana Courier-Press. Learn more on LinkedIn.
Katrina Donald (she/her) is based in Treaty 7 Territory and the principal consultant at ever-so-curious. She believes that listening and sensemaking practices bring us into community, reveal pathways forward, encourage and embolden us, and allow for greater impact. Her approach is relational and developmental; she works in partnership with people and organizations to co-design inclusive, collaborative and continuously emerging evaluation and HR strategies. She holds a Bachelor of Arts degree from the University of Manitoba and a Masters Certificate in Organization Development and Change from the Canadian Organization Development Institute (CODI) and the Schulich Executive and Education Centre (SEEC) at York University. She is a mother, wife, daughter, sister, systems thinker, developmental evaluator, program designer, and a Registered Professional Recruiter (RPR). She’s committed to showing up for her own ongoing learning and to building workplaces that are actively anti-racist, praxis-centered and humble as they work through the prickly bramble of change. Learn more on LinkedIn.
Transcript
Tim Cynova:
Hi, I'm Tim Cynova and welcome to Work Shouldn't Suck, a podcast about, well, that. The conversation in this episode was largely lost in the shuffle of life back in 2022 and only recently rediscovered as we've been in the midst of editing a number of episodes to drop in the new year.
Katrina Donald took over hosting duties in this one and turned the interviewer's mic in my direction as we reflected on the shifts that were and are taking place with wage transparency and equitable compensation laws and practice. While we recorded it nearly 18 months ago, we still felt the reflections were worth sharing after a recent listen. But before we dive in, curious about some of the other episodes we have planned for the coming weeks and months? You're in luck. We have one about executive coaches who center equity and inclusion in their practice. We chat with the two authors of The In-Between: A Companion Book For Uncertain Times and we dive into Gen Z in the workplace.
At the same time, the tape is still rolling on even more new episodes, including one about values-based collective bargaining processes and season two of White Men and the Journey Towards Anti-Racism. So stay tuned for all of that in 2024, but now wage equity and transparency. And over to you, Katrina.
Katrina Donald:
You and I have been getting some questions around pay equity and pay transparency. Maybe we could just take a little bit of time here and chat about that.
Tim Cynova:
It's really starting to take off and I think there's some real urgency that organizations are being met with in New York City requiring all employers to list salaries for roles, internal and external. California has the Pay Transparency Act requiring all employers in California with 15 or more employees to post salaries internally and externally, and so there's a lot of organizations right now who don't do anything like this.
I should also say there's a lot of job boards that are requiring this now. And if they list a salary, then if this is a role that exists in their organization already, will people be finding out information about like, "I didn't know this was the band that I could be paid, or where do I fall in this band if it's $60,000 to $80,000? Do I fall on the 60 side or do I fall on the 80 side?" And so a number of organizations are starting to really worry about what this is going to mean to just their operations and the conversations that they have to start having with their teams.
And even organizations that over the past couple eight years have really started to do a lot of racial equity, racial justice work, anti-oppression work, who you might say are aligned with these values, they're not doing this, which is one of the examples a lot of times that gets raised when we're talking about ways to live your values, list the salary. And there's a meme that I think showed up in my LinkedIn feed that was like, "If your pay is so competitive, why don't you list it?"
Katrina Donald:
Yeah, offering a competitive salary and competitive benefits package, but yet like-
Tim Cynova:
Just tell me what they are.
Katrina Donald:
We'll tell you later.
Tim Cynova:
Yeah, exactly. I think that's one of the big arguments here is like, "Well, who does that favor when we'll tell you later?" Or when you might have to negotiate if you don't like what the initial offer is. I think that's why we think more through an anti-racism, anti-oppression lens, and who's more likely to negotiate or who's more likely to have quote, unquote, "The experience" that an employer might think they're looking for that would put someone to a higher pay band. This is where it starts to get really challenging if you're not ready to have these conversations, especially if you're an organization where effectively every person is paid differently.
You might have paid bands, but there's no consistency sometimes with the five people are in that, maybe two get paid the same, but then you have another person who came in and they're getting paid $10,000 more because they have more experience like, "Well, I've worked this job for 10 years and this person's just coming in, so how do you balance internal versus external experience?" And so there's a lot of challenging stuff that goes into oftentimes one number that expresses how much the organization values you and what you contribute.
Katrina Donald:
You've talked about staying competitive in the market by being able to post compensation information, you've talked about the strong reasons why you should be thinking about this from an anti-racism and anti-oppression perspective. What else are people talking about here? Why is this such a hot button issue? Are there other reasons that we're not thinking of right now?
Tim Cynova:
People are talking about how much they get paid. I think this is one of those misnomers. It's in the same group of if we don't talk to people about when they leave the organization, they'll not think about leaving the organization. No, everyone's thinking about, "Where's my career going? Am I getting what I need from this organization or do I need to look elsewhere?" Same thing's happening with compensation and benefits. And so ignoring it, people are still talking about it. That's one of the reasons why if not, this is the direction things are heading, figure out how to do it sooner rather than later because it's only going to get more complicated.
And so I think those are a couple of things, you have to figure out how you're having those conversations. You have to be honest. This is where we are. We likely don't like where we are, this is why we ended up here, but it is what it is and here's how we're going to now shift into where we want to go. And I think that's the tough conversation for a lot of organizations to have because it is so personal. This is what my value is. I spend the bulk of my waking hours doing this thing and this is what I get paid for it. There's a lot of stuff that's packed into this oftentimes just one number.
And not even thinking about, in HR they call it total benefits or total compensation, and so all the different things that go into this, it's just what's my base compensation? I think that's why it's so challenging, why organizations kind of want to stay away from it because it's going to lead to a lot of really challenging and oftentimes awkward conversations where you're having to explain why I get paid differently than you, and we do the exact same job and we've been in this organization the exact same time?
Katrina Donald:
How do you advise people to think about compensation in a really holistic way?
Tim Cynova:
When I was the chief operating officer and then one of the co-CEOs at Fractured Atlas, we had a strict fixed tier comp model where everyone had a given tier made exactly the same amount regardless of how long they were there. Every person who is at the associate level made, let's just say $40,000. Everyone as a specialist made $50,000, everyone as an assistant director made $60,000. And you could have been there for 10 years in that role or you could be there for 10 days and you still make that same compensation. And that's across the board. That's not just base comp, but people get cost of living adjustments. The whole tier moves together If cost of living adjustment if 2%, it gets applied to all of the tiers and the whole tier moves.
If you do compensation analysis or comp assessments and it shows like, "This is getting paid X under median" and you're like, "All right, we're moving all these tiers to median or to 75% or whatever it might be," they all move at the same place. This was one of the places where I realized no compensation model is perfect. They all have pros and cons, and we had this model before we started our anti-racism, anti-oppression work in 2013. Two of the reasons why Fracture Atlas adopted it even before my tenure was because research shows and people know people in different protected classes get paid different rates and because people talk about their compensation, let's be honest about what it is, and also help to address people who are doing the exact same role who traditionally, and maybe in other organizations would be paid different amounts.
It helps to address. It doesn't solve, but it helps to address. And so every couple of years we take a look at this compensation model to say, "All right, so the positive's that way, the negative's here." Yeah, but we have to think more holistically than just the dollar amount. And so that's where we, all right, can we increase the 401(k) match? Everyone had access to $1,000 annual professional development allowance. During certain times, there were different kinds of bonuses like year-end bonus or revenue-based bonuses. Then people had a member ticket allowance so you could use your ticket allowance to go to performances or events. Then we introduced unlimited paid vacation days. Most people were taking 20 to 30 paid vacation days a year even if it was their first year in the organization.
And then we had hybrid work arrangements even before COVID and then we upped our sick days to be 15 because we need something that addresses people who might have chronic conditions. We went over and above in some places two to three times what the law said that you had to provide because people need to have that flexibility. There's all these different things that you try to create an environment where the whole thing is helpful. At the end of the day though, some of those things don't pay your bills. We've been doing a lot of hiring together and working with organizations on hiring and around this piece of pay, being really a penny that you have to post your salary, especially the work that we're doing, it's values-based.
If you hold values of equity and inclusion, justice, you can't post a job without the salary. And one of the encouragement that we're providing companies is like get it as high as you can because if you're hiring an executive director or something and say, putting 75 in, but we could go to 85 or 90. Well, if you could go to 90, say 90 because then you're going to get different candidates who otherwise they're like, "I'm not going to apply for something that says 75, but actually 90 sort of fits what I need." And then be open about the other benefits. Does dependent care get covered in insurance? Because that also gets brought into this.
There's also that piece where how happy is a new employee going to be when on the second day they find out that they could have been making $5,000 more? All of the work that you did to create a psychologically safe and caring interview process and bringing them into the organization. All the time you spend immediately gets undercut when someone's like, "Oh yeah, you could have made 75 but you're getting paid 70." How immediately do you go from excited and actively engaged to shift down to disengaged or disgruntled in your first week?
Creating a structure that's clear and consistent and transparent so everyone knows, helps avoid some of these things that exist in organizations where you're talking over lunch and you find out all these little things once you're inside of the organization that just sort of undercut one's ability to say, "That cleared what I need and now I can focus on this thing. I can park that because it clears the threshold that I need to meet for this role and my current needs."
Katrina Donald:
From an employee perspective, I can really see how thinking about pay equity and being transparent about pay can be an asset. You can really know where you're at. You can kind of, like you said, leave behind some of the anxiety that comes around finding out that you could have been paid more or you didn't negotiate or others are getting something different than you're getting.
From the organizational perspective, something that we hear is, "Well, that's just expensive." If you assess a role that's new or coming in and it's higher and you have to raise the whole tier up to that and then you have to look at the different tiers and how there's relativity between them. We've got all our passionate reasons why, but how do you start to move towards that kind of a system? I know you've got some stories and experience around this as well.
Tim Cynova:
This is where organizations need to get really clear what has to happen, what has to happen or what do we have to do or what's our special sauce in the work that we're doing versus what are the nice to haves? Or someone else is doing this, we don't necessarily have to do this because we can't do everything, but we try because we're underpaying people. And I think this is one of the things where you see this a lot in the nonprofit sector. The sector tells itself that people are getting the positive benefits of working for nonprofits, which is why they get paid less versus actually you could just pay them better and have them do less because you're trying to do all these things and there's resource scarcity.
You start burning through people because they're trying to do all these things rather than just being clear to be like, "What are the two things that we as an organization or we as a team have to get done and it fits squarely in our wheelhouse?" That's our special sauce. That's what we focus on. And so you might think, "All right, so we add a 10-person team and we actually only need seven, which means we can take that extra three and spread that out." So you raise a tier. Also, you do this over time. I've not worked with an organization or met an organization and there probably aren't many out there who could say, "All right, so we did a comp assessment and we found out that everyone is more or less getting paid 87% of median or whatever it might be, and we want to get everyone to median if median's the goal here. We've done the budgetary analysis and it means we have to add an extra $100,000 to payroll to get people there."
There are very few organizations that could just drop another $100,000. I found it helpful to say, "All right, so being honest with everyone in the organization, here's where we are based off of this and here's how we're going to try and get to here over two to three years." And so everyone moves to 90%. It's from 87%, then 90%, then 95%, then 100% over the next three years. And so I think in being transparent and having the conversations around where you are, where you want to go, and how you want to get there starts to change the dynamic from the secrecy that oftentimes happens around compensation.
There's also that challenge too around internal versus external equity. We had this at Fractured Atlas in a really challenging way where 25% of our staff were software engineers and the external market for software engineers is different than the market for program staff at an arts nonprofit. And so how do you reconcile that you have different external markets all working in the same organization, and that's part of what we had to try and figure out like, "How do we mesh these things together and so we can be consistent?" Because at the end of the day, this organization does not work if all of these roles that we've assessed, we need all these roles to do this work, have people in them that are able to do that work.
So there's a trade-off, and this is one of the challenges that we faced at Fractured Atlas with the strict fixed tier comp where we lost a lot of really great people because they got into a role and they're like, "I need more money." In order to get more money, you either needed to leave and get a different job or get promoted into the next tier. And sometimes a role wasn't available in the next tier, a role wasn't available that fit your knowledge, skills, and abilities or where you wanted to go, or you were at the top of the organization in roles that there was no place to go. And so if you wanted to get more money, you had to go someplace else. And so that was one of the downsides of a strict fixed tier comp.
At the same time, everyone understood coming into the organization, "This is why we have this thing, this is why we value it." And it changed the conversations around, "We're not all here forever." And so it combined those two conversations that organizations oftentimes don't have to say, "We're all here for just a couple of years. Maybe that's two years, maybe that's five years, maybe that's 12 years, whatever. But we're not here for the rest of our lives, so how can we create a structure that invests in people where they get what they need for the next thing so they're ready to move on and that the organization is growing in the ways that it needs for today and tomorrow versus the way it was structured last year or when it was founded.
And so there's this constant iteration and development similar to that cartoon where it's two people talking to each other. It is a CFO and CEO or something. The first person says, "What if we invested in them and they leave?" And the other person says, "What if we don't and they stay?" There's a nugget in there that I think most organizations don't make the time to say, "What message does this send both to the people that are here that want to work here and how does that impact the work that we're trying to do as an organization? And how much richer, more meaningful, better, more joyful fun might this place be if we engage in this type of work versus the traditional, no one has access to information, we're very secretive about these different things?"
When in fact people either have access to the information because people are talking or it's that game of telephone where they have altered what it is because they just don't have access to it. So it's gone passed through four people and by the time it gets to the fourth person, the name someone says on the telephone is no longer Tim Cynova.
Katrina Donald:
It doesn't feel like we're talking about a little bit of transparency just around pay or compensation. You're talking about if we even need to open the door about how to be transparent, about the fact that we don't expect everybody to stay and that maybe that's a good thing, about the idea that what tiers are and what they're making and about what the implications are for maybe thinking about this differently within the organization from an operating budget perspective, what is your advice to organizations who are starting this who maybe don't have a ton of experience in any kind of a transparency in terms of a broader conversation about the financials with their kind of whole broader teams?
How do you start small on this? Is it better to start with a project like pay? Is it better to start with littler things and then sort of move into it? How do you phase thinking about operating differently, being more transparent?
Tim Cynova:
This is one of the places where it's really important to be grounded in what are the values that you hold personally as an organization? And being grounded in these values is what will help you because you're not going to have fewer conversations, you're going to have more conversations around this. And there can be more challenging conversations, especially in this really messy period if you don't operate this way where you get to a place where you operate this way. And being really grounded in why are we doing it, what's the purpose of this will help provide that North Star, if you will, as you're going through some really challenging messy conversations where people leave, people get upset, and it's the work that we need to be doing.
And there's so much that operates beneath the surface here where it's like Adams' equity theory, Vroom's expectancy theory. If I get paid a dollar less or a dollar more than someone else who's doing the exact same job, I have a different relationship to that person. There are relationships and value, and so there's a lot at play here that's not just that number or that package. And so there's a number of different ways that you can go about doing this. You can break it, you can just share everyone's salary. You can try and edge into it slowly, although I'm mindful of those in my community and networks who are talking about creating anti-racist workplaces or anti-oppressive workplaces. And do you want to work for a place that will eventually get to justice in 40 years? We will slowly make that turn to get there, but we're not going to get there while we're still working there.
This is one of those things where I think a number of people decide like, "Maybe I've gotten as far as with this organization as I can. I pushed them, they're working on it, but they're not going to get the entire way." And I think this is for us individually where we need to calibrate how willing are we to be a part of this? And I've known people who get organizations to the place of, "We have to do this thing, we have to publish salaries, we have to be transparent with our information." The organization starts doing it, and they're like, "And now my time is done. I'm moving on. It's someone else's job to take this over from here because it's not going to get to the place where I need it to be, where I want it to be while I'm still employed."
And I think those are really tough conversations because in almost all of those, there are people who I really appreciate the company, what they're doing. I love working with my coworkers and yet, it doesn't give me what I need. And so I think these are conversations where we try to lay the foundation for open, honest conversations that are rooted in care and understanding and humanity, and we can't do everything at the same time. It's just one of those things where I often think about holding multiple competing truths at the same time and still doing something, trying to figure out like, "All right, well, how do we reconcile all these things?"
This is one of those areas where I think everyone, especially as you get more information about how the organization works, there's often sort of this wave where you're just learning for the first time and you have to process it and what does this mean? And oftentimes it's not cool. That's great. There's some really challenging conversations that need to happen from that. So from an organization, how are you building in processes so that people can reflect back their questions?
The Google form that accepts anonymous questions that you take during a staff meeting, you set up a Google form where people don't have to be logged in so they can register a question or a concern and say, "All right, we wanted to move towards pay transparency. What are you concerned about? What do you think we should be thinking about?" And at the next staff meeting, just go down the questions and answer them. And some of them are going to be pretty awkward and pretty challenging, but you start to engage in a process that brings everyone into like, "Here's the complexity that you're sort of trying to balance."
I'm mindful of an organization that I advised that they decided to go with the break it model. It was a relatively small organization, they just circulated the Excel sheet and be like, "Here's everyone's salary." And there are some people who are like, "I didn't want people to know my salary because now it's awkward and people know that I get paid that internally and externally." Sort of at Fractured, we did this we're like, "You're hiring a program associate? We have eight of them at the time maybe." And so every time you post a program associate role, everyone in the world who looked at that salary listing knew that every program associate made $40,000 or $50,000 or whatever it was. And so there's different ways pay transparency impacts individuals here. Trying to be mindful of all of those dynamics is really challenging and really messy and also the work that's necessary.
Katrina Donald:
That feels like a really important piece of this. I think the piece you talked about around having a Google form for anonymous questions and then tackling what's front of mind for the employees. In those kinds of forms, and forms aren't always the answer, but in those kinds of forms, people will tell you whatever they need to tell you. It doesn't matter what the question prompt is or anything else because if it's important enough that they give you the information, they're just going to give it to you. And so that's often like, "What are we seeing pop up in a form like this or on a mural or something else where we can take our cues of how to structure this conversation or our sharing?"
And then the idea is we've asked for this, how do we answer these or address how we are going to make decisions or learn more about the question that you have if we don't have the answer? So you're not just sharing numbers or thinking about the impact on people, but you're also saying, "If we don't know the answers, here's how we're going to so that you can start to build some of that trust as well." There's that unveil and then there's building trust over time so that you can start to appreciate what those questions are in a different way and start to model a new way of holding that transparent space in the organizations.
It's easy to ask for feedback, but it's not always easy to answer the questions or address the issues that come up in an open forum. And so that requires some commitment, I think, to this process.
Tim Cynova:
This is one of those places too where most people aren't going to ask questions in a neutral way without judgment or without opinion. And so when you receive those, that's a challenging place to be like, "What are people asking? How do I answer this?" When you might be like, "I created this thing and so this is getting 80 of these questions that are sort of judgmental questions about how this is run or how it's run and it takes a toll." And so how do you as the receiver to answer these questions, what do you need to be thinking about to show up in a space that can, people genuinely have these questions? They wouldn't be asking them if they didn't have the question.
How do you show up in a space that doesn't make it worse? Because a couple of ways that this can go sideways on you. One, take the questions and don't answer them or take the questions in a way and answer them, people are like, "I'm not answering any more questions." And then it flames what are already challenging feelings that people have or confirms suspicions about how the organization operates. So I think continuing to do that through this comfort is really important and something that a colleague of mine offered a number of years ago, we were talking about challenging conversations and he said, "People will spend a lifetime avoiding an awkward 90-second conversation."
And there's a lot of awkward 90-second conversations here where you're like, "All right, this is going to be really stressful and awkward and afterwards this is going to be done and we're going to get to a new place." I think there's a piece here too where it goes back to the why this is important for organizations around the amount of time and resources you spend. Let's just think about the hiring process and why it's important to put that salary in the job posting. Because I've heard from colleagues of mine who are like, "When we get to the point of negotiating with the salary, we're really open about it. We have it in our mind. This is what it is, regardless of who the candidate is, who gets this point, they're going to be paid $150,000 or whatever it is."
But in not making it public, all of these candidates have opted out of feeling like that job was not worth their time because it could have also paid $75,000 or it could have paid $300,000, but you miss out on all these other candidates. And so yes, you might have that as part of your process where we know the exact salary that we're going to give the candidate. When they get to the third round, we're going to let them know, or when we get to the first round, we're going to let them know. You've missed, I don't know, maybe 100$ or more of candidates who might have applied had they known what that salary is, but they looked and said, "I don't have the time, I don't have the bandwidth to even set aside the time to apply for this if it's not going to meet my needs."
And so this is one of those places where doing it up front, it helps, doesn't level the experience, but it just provides so much more information for people to make a decision about like, "Is this role, is this organization going to fit my needs right now?"
Katrina Donald:
Tim, what are some of the variables that people are thinking about when they're trying to work out what their pay equity scales are, how they're thinking about pay equity? How are they sketching out that whole conversation?
Tim Cynova:
There's a lot of really interesting conversations that are happening right now, especially as organizations are trying to balance this with hybrid workplaces, where do people live and work? And we're seeing a number of organizations who have created high profile news articles around they're going to start paying people differently depending on where they live. We're seeing this in some tech companies where they might be based in the Bay Area in California and now they're entirely virtual, and so maybe you got paid $100,000 living in San Francisco, but if you move to Cincinnati, Ohio, you're only going to get paid $75,000. Same job, and you take this $25,000 pay cut.
You should not do this. You should not balance your budget or try and do this based off of where people live for a number of different reasons. First of all, it's not the right thing to do. If you're going to pay people $100,000 to live in San Francisco, pay people $100,000. The other thing is just from a logistical standpoint, oh my God, so you're going to pay people $75,000 if they move to Cincinnati, what if they live there for three months and they move to Chicago? And then you're going to have to figure out how much you're paying them. And then what if they move to Spokane or what if they want live in France? All these different things.
If you're going to pay people $100,000, just leave it at $100,000 and leave it for the tier and don't try and balance it based off of how people want to live their lives. Let people know, "This is what you have available to you and you' figure out how it meets your needs or doesn't." So I think that's one of the first big variables that we're seeing a lot of right now.
The other thing is around people who are trying to build equitable pay structures that include a number of different variables. There's some really cool organizations that have published how they think about what a role gets paid, including a lot of different variables around they factor in tenure, and disability, and race, and gender, and military service, and various certifications that you might have or the number of people that this person might be caring for. And then that helps figure out what this role gets paid. That's really cool.
And from a logistical standpoint, again, really gets complicated where you're trying to manage this for an organization that might be growing. It was relatively easy when there are six people or 10 people and now you have 40 employees and then you have 40 employees with different values as it relates to anti-racism or anti-oppression. So how do you choose what's on that list of variables? Do you every year put some in, pull them out, or add them? This is one of those things where I keep going back to like God, strict fixed comp was, again, not perfect, but it helped in a way that just clarified what this was and then allowed you to think about some other ways around talking with an organization that was trying to figure out how reparations could be incorporated into comp structures or how you could equitably think about employer contributions for 401(k) or 403(b) in the US.
And so there's some really interesting ways that people are starting to approach it, where oftentimes with a retirement plan with a 401(k) or 403(b), an employer will match contributions. Seldom will an employer just say, "All right, we're going to give everyone 2% regardless if they participate or not." And so thinking about who has the means to participate at various levels, so everyone just gets 2%. And then if you want to contribute to it, then we'll start matching. So that's one way.
I also talked with another organization where they were going to pilot a plan rather than a one-to-one match that still is related to the pay that you get. So 1% for someone who makes $50,000 is a lot different than 1% for someone who gets paid $200,000. So what they did was say, "All right, so in a course of a year we pay out as an employer contribution, let's say $25,000 or $50,000." Rather than doing that on a percentage basis for the comp that it's against, they break that up evenly among the number of employees who are contributing at the time. And so you break $25,000 up 10 ways, that number is going to be a lot more for someone who gets paid $30,000 or $40,000 than it is for someone who gets paid $100,000 or $150,000. And so that's an equitable way of thinking about compensation.
Now, on the other end, the higher end, you have to be an organization that those getting paid 100 or 150, that aligns with their values and aligns with their values in a way that they've opted in or opted out from their organization to say like, "Look, I could get paid X amount if I worked at another organization, but I work for this organization because it aligns with my values. And one of the ways it does is through this atypical, if you will, employer contribution." There are a lot of ways this can show up. There's one more way in mind that I think this can show up when you think about total compensation and benefits crafting is around paid holidays for an organization.
Most organizations don't even give a thought to the holidays that they pay for. In the US, most organizations probably use the standard 12 bank holidays, if you will. It's Christmas day, New Year's Day, New Year's Eve, or July 4th and Columbus Day, and without giving any thought to like, in paying people for this holiday, you're explicitly recognizing this holiday's value in a way that are you paying for Juneteenth or are you paying for religious holidays that are not Western European Christian holidays? This is really interesting work that's happening right now as people are starting to realize this. How do we structure it in a way that, all right, we're going to be closed for these five days because everyone we work with will probably be close for these five days? And so let's just be close for these five days and we'll give you 10 flex holidays.
You set them, but you decide how you want to spend these paid holidays in a way that aligns with your values and your beliefs and not ones that probably are set in the 1950s by some corporation. They're like, "Yeah, these are the holidays we're taking." And so I think when you start to think what if, how might we, how can we retool this, what if we restructure this? There's so many ways organizations can flex if you're willing to start looking outside of that one number. Certainly focus on the one number, but also don't do it at the exclusion of all of these different things that support people during their tenure with your organization.
Katrina Donald:
Those are a really great way to think about all of the variables that are involved, all of the ways that employees and the organization need to be cared for through all of the little actions that come in to making a compensation structure that is fair and equitable, a process that is transparent. There's a lot there, and you've given us lots of examples and things to think about. Thanks so much, Tim.
Tim Cynova:
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