In our previous post, we set the foundation by diving deep into job architecture and role definition. Both set the foundation to mitigate bias and inequality in the following processes: performance review and compensation review.

In this blog post, I aim to explore how we can mitigate gender bias in the critical processes of performance management and compensation review.

Performance Management

Performance evaluations can be vulnerable to personal judgments and ingrained biases, which can inadvertently influence assessments.

However, there are several steps and concepts companies can use and apply to mitigate the risk and ensure that performance evaluations are part of the solution and not the problem:

What the reviewer can do:

• Consistency in Criteria: Reviewers should use skill definitions and role expectations previously established in the job architecture as their standard set of criteria for evaluation. By applying this focus on skills, reviewers can ensure they provide objective feedback.
• Written Notes: To avoid the recency bias, which favors recent events over historic ones, reviewers should take frequent notes during the review period (e.g., 1:1 notes) to be able to review them while preparing for the review.
• 360 Feedback: Using additional feedback from various stakeholders, such as peers, project team members, and the like, the reviewer receives additional information about the performance and the perceived support provided by the reviewee.

What the HR department can do:

• Check for Consistency: HR departments should ensure that reviewers uniformly apply objective criteria, like the competencies outlined in the job architecture, during performance evaluations.
• Sentiment Analysis: HR teams can employ sentiment analysis tools on performance reviews to detect underlying patterns, which might unveil biases related to gender.
• Review Rating Distribution: Teams should compare the distribution of performance ratings or scores between genders and look for any significant discrepancies in the average ratings received by males and females. It should also have the distribution of top and bottom performance ratings analyzed to see if one gender is disproportionately represented at either end of the performance spectrum.
• Use of Language: HR experts should analyze the language used in written feedback for gendered language or stereotypes. Women are sometimes described using terms related to their interpersonal skills (e.g., “supportive,” “collaborative”), while men may be more frequently described with terms that emphasize agency (e.g., “assertive,” “independent”). HR teams should check for differences in the type of feedback provided (constructive vs. praise), focusing on whether feedback is actionable and related to business outcomes.
• Check for Other Effects: HR teams should examine additional factors such as part-time status, remote work options, and similar policies, which women might utilize more frequently, to ensure these do not inadvertently impact performance evaluations and compensation.

While the steps outlined present a robust framework for creating a more equitable performance process, it’s clear that they demand a significant investment of time and diligence from HR teams and reviewers alike. This is where the power of AI can be transformative. AI has the unparalleled capacity to analyze vast datasets quickly, identify complex patterns, and provide unbiased insights that might elude even the most conscientious human reviewers. By leveraging AI, organizations can enhance their efforts to detect and correct gender biases, ensuring the path to equity is navigated with precision and fairness.

Compensation Review

The final step is the compensation review. Here, we not only observe the outcomes of our previous efforts to diminish structural gender inequalities but also engage in a crucial assessment where the gender pay gap becomes quantifiable. However, our analysis must go beyond merely calculating the unadjusted gender pay gap. By systematically breaking down the evaluation into specific categories and employing statistical methods, you’re setting the stage for an in-depth and nuanced understanding of where and why pay disparities may exist. Here are some strategies that can further enhance our understanding and remediation of pay disparities:

• Average Compensation by Gender: Starting with a high-level comparison of average salaries and total compensation between male and female employees sets a baseline understanding of the pay gap. This step is crucial for identifying the broad landscape before diving into the granular details.
• Compensation by Job Role and Level: Adjusting for job title and seniority ensures that comparisons are fair and relevant, accounting for variations in job responsibilities and experience levels. This methodological approach is essential for pinpointing specific roles or levels where disparities might be most pronounced.
• Control for Objective Factors: Incorporating controls for experience, education, performance rating, and work status (full-time vs. part-time) allows for a more precise analysis. These factors are directly related to compensation and can help isolate the impact of gender from these other variables.
• Tenure and Company Loyalty: Considering the impact of tenure and loyalty underscores the importance of career progression within the pay equity equation. Investigating whether there are gender differences in tenure and how that translates to compensation is key to understanding long-term pay disparities.
• Leave and Work Breaks: Evaluating the impact of leaves, such as parental leave, on long-term compensation is critical. This analysis can uncover if and how these career interruptions contribute to gender-based pay differences, ensuring that policies around leave do not inadvertently penalize one gender over the other.
• Promotion Paths and Opportunities: Analyzing promotion rates and the time to promotion between genders can reveal if there are blockages or biases in career advancement that affect compensation equity. This area is particularly important for identifying systemic barriers to equal advancement opportunities.

The path to closing the gender pay gap is complex, requiring not only policy change but also a cultural shift. By embedding equity into the fabric of our performance and compensation frameworks, we’re building not just a fairer workplace but also setting a standard for others to follow. Let’s commit to these practices and ensure that our collective future is one of equal opportunity and recognition for all.

Take the next step towards a more equitable future. It’s time to harness the power of technology and data, and SmartScaleHR is here to lead the way. Our AI-powered platform offers the tools and insights necessary to navigate these challenges with precision and care, ensuring your organization not only meets but exceeds its goals for equity and inclusion. Let’s build a fairer workplace together, where everyone’s contributions are valued equally.

Get in touch with SmartScaleHR and learn how we support companies shaping a world of work where gender bias is a thing of the past.