I posted the following blog today inside IBM to detail for IBMers our approach for equal pay. In the spirit of transparency, and participating in the conversation about equal pay today, I wanted...
I posted the following blog today inside IBM to detail for IBMers our approach for equal pay. In the spirit of transparency, and participating in the conversation about equal pay today, I wanted to share this outside of IBM as well. I am incredibly proud of our long history of being on the right side of this topic, and proud that at IBM, overall women earn $1 for every $1 earned by men for similar work.
Blog posted today for IBMers:
Today is Equal Pay Day in the United States, and I wanted to address some questions I’ve heard IBMers ask about our approach to equal pay.
Many IBMers know about and are proud of our history on diversity and equality in the workplace. We’re proud that Thomas Watson Sr. issued IBM Policy Letter #4 in 1953– declaring both that our policy on hiring is based on talent “regardless of race, color or creed”, and our belief that everyone has “an equal right to live and work in America”, before Brown v. Board of Education became law.
What many IBMers aren’t as familiar with is our history, practices, and results around equal pay. In 1935, Thomas Watson Sr. made it clear that at IBM, men and women will do equal work for equal pay:
Men and women will do the same kind of work for equal pay.
They will have the same treatment, the same responsibilities and the same opportunity for advancement.
- Thomas J. Watson, Sr. former IBM Chairman and CEO, 1935
This was nearly 30 years before the Equal Pay Act was signed into law in the US.
When I joined IBM 20 years ago, I saw this policy in action. We performed analysis on pay equity in the United States, looking at gender, race, and ethnicity. We made investments in salary programs if discrepancies were found. And this was not a new policy – my colleagues at the time recalled this type of analysis being done as early as the 1970s. As a human resources professional just starting out in her career, this made it incredibly clear for me how a company should act, and how it’s our actions that ensure we live up to our policies and our ideals.
Knowing about our history on this issue, I was frankly surprised several years ago with other companies talked about “discovering” that pay equity was an issue, and loudly proclaiming they were going to act. We’d been acting for decades.
That being said, we continually work to modernize and scale our practices. Pay equity analysis is now performed in every country where we have IBM employees. We look at how not just to correct pay equity, but to prevent it. We offer competitive salaries to early professional hires – without the need to negotiate, which can introduce discrepancies and inequities. We changed hiring practices for experienced hires to focus on the value of the job, not on prior salary. We established new standards on pay for promotions. And we developed IBM Compensation Advisor with Watson – an AI-driven solution that gives managers salary increase recommendations based on skills and pay competitiveness.
I am incredibly proud of our long history of being on the right side of this topic, and of the results. In IBM, overall women earn $1 for every $1 earned by men for similar work. The same is true for underrepresented minorities in the US.
To give you more insight on how this works, each year we follow a consistent methodology to identify and address pay gaps. We define distinct peer groups consisting of employees doing the same type of work, in the same country, at the same level. We compare salaries between men and women in each peer group, looking for differences in average pay, and we make salary adjustments if needed, whether it be for women paid lower than men or vice versa, to fully close gaps. In the US, we also compare pay for minorities, and at the intersection of gender and race.
In 2020, more than 90 countries were included in the analysis – every country where IBM has employees. 89% of the total salary investment for pay equity was to address gender pay gaps globally and 11% of the investment was based on race and ethnicity in the United States. Of the total investment made, whether for gender or race, 92% went to women and 8% to men.
Our work is not done. We continue to refine our policies and practices to correct and to prevent pay inequity. While equal pay for equal work is table stakes, we are also focused on improving the representation of women and minorities in higher paying professions and at more senior levels of leadership. We are building new pathways into technology careers via programs like P-TECH and Apprenticeships. And not only in IBM, but in society more widely, we’re having difficult but necessary conversations about how caregiving responsibilities and racial inequity can adversely affect our careers and ultimately our pay.
An important lesson that I take from IBM’s history on equal pay is that our polices, and our actions, should not reflect the world we live in today, but the world we aspire to create. With that in mind, I look forward to the work ahead.
Vice President, Compensation, Benefits, Corporate Health & Safety, and HRBD