Google discovers that company wage gap favors women

Published 12:00 am Tuesday, March 5, 2019

When Google conducted a study recently to determine whether the company was underpaying women and members of minority groups, it found, to the surprise of just about everyone, that men were paid less money than women for doing similar work.

The study, which disproportionately led to pay raises for thousands of men, is done every year, but the latest findings arrived as Google and other companies in Silicon Valley face increasing pressure to deal with gender issues in the workplace, from sexual harassment to wage discrimination.

Gender inequality is a radioactive topic at Google. The Labor Department is investigating whether the company systematically underpays women. It has been sued by former employees who claim they were paid less than men with the same qualifications. And last fall, thousands of Google employees protested the way the company handles sexual harassment claims against top executives.

Critics said the results of the pay study could give a false impression. Company officials acknowledged that it did not address whether women were hired at a lower pay grade than men with similar qualifications.

Google seems to be advancing a “flawed and incomplete sense of equality” by making sure men and women receive similar salaries for similar work, said Joelle Emerson, chief executive of Paradigm, a consulting company that advises companies on strategies for increasing diversity. That is not the same as addressing “equity,” she said, which would involve examining the structural hurdles that women face as engineers.

Google has denied paying women less, and the company agreed that compensation among similar job titles was not by itself a complete measure of equity.

A more difficult issue to solve is a human resources concept called leveling. Are employees assigned to the appropriate pay grade for their qualifications?

The company said it was trying to address the issue.

“Because leveling, performance ratings and promotion impact pay, this year we are undertaking a comprehensive review of these processes to make sure the outcomes are fair and equitable for all employees,” Lauren Barbato, Google’s lead analyst for pay equity, people analytics, wrote in a blog post made public Monday.

To set an employee’s salary, Google starts with an algorithm using factors like performance, location and job. Next, managers can consider subjective factors: Do they believe the employee has a strong future with the company? Is he or she being paid on a par with peers who make similar contributions? Managers must provide a rationale for the decision.

While the pay bump is helpful, Google’s critics say it doesn’t come close to matching what a woman would make if she had been assigned to the appropriate pay grade in the first place.

Kelly Ellis, a former Google engineer and one of the plaintiffs in the gender-pay suit against the company, said in a legal filing that Google had hired her in 2010 as a Level 3 employee — the category for new software engineers who are recent college graduates — despite her four years of experience. Within a few weeks, a male engineer who had also graduated from college four years earlier was hired for Ellis’ team — as a Level 4 employee. That meant he received a higher salary and had more opportunities for bonuses, raises and stock compensation, according to the suit. Other men on the team whose qualifications were equal to or less than hers were also brought in at Level 4, the suit says.

The claim could become a class-action suit representing more than 8,300 current and former female employees.

The pay study covered 91 percent of Google’s employees and compared their compensation — salaries, bonuses and company stock — within specific job types, job levels, performance and location.

In response to the study, Google gave $9.7 million in additional compensation to 10,677 employees for this year. Men account for about 69 percent of the company’s workforce, but they received a higher percentage of the money. The exact number of men who got raises is unclear.

The company has done the study every year since 2012. At the end of 2017, it adjusted 228 employees’ salaries by a combined total of about $270,000. This year, new hires were included in the analysis for the first time, which Google said probably explained the big change in numbers.

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