Here’s how it works: Directors establish a band of pay based on the type of role — there are 13 job categories across the company — and location. They appraise the market for employees’ skills and their level of experience. How much employees are paid within that band depends on conduct, which managers are asked to rate by answering a series of very detailed questions designed to eliminate bias.
The valuation includes a dozen categories, including whether employees have met specific performance targets and applied skills such as plan, vision, communication and collaboration. Managers rank employees performance across those categories on a scale ranging from “exhibit” to distinguished.”
“We don’t leave it to chance, and we don’t leave it to individual managers to pick their favorite people,” says Pentland. “You accept away the…subjectivity.”
In the final phase, the HR team works with outside consultants to review pay and promotions across the institution by gender and ethnicity and make adjustments. “It’s ensuring that you’ve got the guardrails in place,” she says. “You’ve got managers trained so that those of bias behaviors don’t creep in, and then you’ve got third party assessment double checking, auditing almost those decisions that are give the impression of run off .”
One of the managers who’s been implementing this intensive pay process over the past four years is M.J. Austin, PayPal’s Superior Director of Technical Product Management. She’s a parent who returned to the workforce after taking time off with her young look-alikes, since then she’s been promoted five times in 10 years. She was surprised to find that even she had senseless biases.
“It doesn’t matter who you are and what your gender is,” says Austin. “That unconscious bias does appear up. It shows up when you look at the salary that you’ve paid different employees and you say, ‘Wow why is this 2 percent less each year for say an staff member who is female versus male?,’ and then you realize that going through this, there is just this habitual unconscious bias that happens.”
Austin says that performing the in-depth review process for each of her hands doesn’t actually generate any more work.
“It actually makes it a lot simpler, because it’s very clear what the intent framework says, and how to evaluate your employees,” she says. “From a management perspective, it’s like following step 1, 2, 3, and pull down that done.” Austin says it’s helped her communication with her employees about their performance, and reduced the needfulness for them to ask for promotions, when it’s on the table three times a year.
That constant conversation about performance — and the engage of equal pay — is valuable for at every step of an employees’ career.
“Where it’s definitely given us an advantage is in recruiting talent,” says Schulman. “I over we have a really good reputation that we are looking for a diverse workforce, and when you have the best talent then you come around with customers better than anybody else . And when we serve customers better, [we] serve shareholders better.”
But match pay is just one challenge, and may actually be one of the easier ones to address, Schulman says.
The greater challenge is in bringing a more varied group of employees into leadership. He transformed PayPal’s board from having just one woman to being 50 percent female. And he says 58 percent of the house’s employees are women and people of color (described by the company as “global females and ethnic males in the U.S.”), as are 51 percent of those wage-earners who are VP-level or higher.
He’s also training employees at every level to address unconscious bias.
There’s no question that dissimilarity makes the company better, says Schulman. “When you have a difference of opinion you make better decisions, because you can see all sides of the tale,” he says. “When you don’t have that, you’re operating from one perspective alone and inevitably that’s going to be wrong.”
Schulman ambitions other companies adopt PayPal’s philosophy. “It’s the right thing to do,” he says. “It’s also about self-interest as a company and how we conquer serve our customers, because this idea of more diverse companies perform better — that’s a fact.”
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