Google: We can close the gender pay gap. Here's how.

'We can change the system'

Fairly compensating female employees starts with putting less stock in the question, "What's your current salary?" Laszlo Bock, SVP of people operations at Google, argues in an opinion piece for the Washington Post

Numerous studies show that women are systematically paid less for the same work than their male peers. According to one study by researchers at Cornell University, women are paid 92 percent of what men are after controlling for job type, experience, and other factors.

As Bock notes, there are many reasons for the pay gap, such as women being less likely to ask for raises. But hiring and compensation practices also play a role.

A major issue, Bock says, is what cognitive scientists call anchoring bias: our brains let an initial number affect our thinking. 

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For instance, researchers at Princeton University asked people to estimate the percentage of African countries that were United Nations members. Before doing so, they had study participants spin a wheel to that would either land on the number 10 or 65. Those who spun a lower number consistently estimated a lower percentage.  "They had unconsciously anchored on the initial number," Bock explains.

The same problem comes up in the hiring context: Firms, Bock says, "anchor too much on [an applicant's] current salary instead of what the job is worth."

For instance, if a male making $58,000 and a female making $50,000 are both hired for the same job that typically pays $60,000, companies may think it's unfair to give the female candidate such a significant raise. But that is anchoring bias, Bock says, and it's part of what perpetuates pay inequality. 

The better approach is to pay people based on the role, not based on their salary history, Bock argues. Each job at Google has a salary target set by human resources based on industry surveys. "If a candidate's current pay is below our target for that job, we simply ignore the prior salary and offer our target," Bock says.

According to Bock, companies should also establish systems to guard against bias, such as in promotion rates. Using such an approach, Bock says that controlling for factors such as experience, education, and job type, Google provides completely equal pay to men and women.

"The systemic underpayment of women chips away at our society's values of fairness and equality—and has a real economic impact on our daughters, sisters, and mothers," Bock warns. "But we can change the system" (Bock, "On Leadership," Washington Post, 4/29).

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