After accusations of wage discrimination against Google for underpaying women for doing similar jobs that men were doing, the tech giant began conducting internal audits in 2012 to look for pay disparity between the genders and with other minority groups.
But Google didn’t stop there. It also set up a compensation fund to reimburse members of groups the audit found to be receiving inequitable pay or to increase their compensation to level the field. This year, Google conducted the internal audit, crunched the numbers, and then reached into its pay disparity make-good fund and made increases to the pay to thousands of…men.
That’s right, Google’s internal audit of pay disparity for 2018 found that at least one group, male Level 4 Software Engineers, were being paid less than women with similar jobs and accounting for performance, location, and other factors. In response to the audit, Google compensated 10,677 employees an additional sum totaling $9.7 million to offset the underpaid wages, Google Lead Analyst for Pay Equity Lauren Barbato wrote in a recent company announcement. The payout presumable includes the Level 4 men, however, Google didn’t state what percentage of those employees who received pay adjustments were men.
“Our pay equity analysis ensures that compensation is fair for employees in the same job, at the same level, location, and performance,” wrote Barbato. “But we know that’s only part of the story. 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.”
After the 2017 audit, Google increased compensation for 228 individuals, including men and women, for a total of $270,000. It says the large increase in this year’s additional compensation is due to efforts to fix pay imbalances in offers made to new employees.
Gender pay inequity has been a tough topic for Google. In 2017, the Department of Labor sued the company over allegations that it was systematically underpaying women. Some individual women have also sued the company for pay discrimination, including four women who filed a suit last year. That suit seeks class action status, on behalf of women similarly situated at Google.
Google’s Audit Methodology
The pay gap internal audits could go a long way to advancing Google’s good intentions on the topic of pay inequity. Google’s methodology relies on some heavy statistical analysis to make comparisons among groups. It uses job levels and only analyzes groups that have at least 30 members for statistical significance.
Google provides a synopsis of its methodology, including the following:
“To ensure we can produce results that translate to meaningful action, we run our analyses at the job code level, adjusting for job function and level,” the company stated in a public document.
Here’s how it works:
- At the end of our annual compensation planning process (for salary, bonus, and equity) we run rigorous statistical analyses to check the outcomes before any amounts were final. We conduct separate ordinary least squares (OLS) regressions to check for pay equity in each job group—a job group is made up of job family (like Software Engineer) and level (like Level 4).
- The OLS method allows us to account for factors that should influence pay (e.g., tenure, location, performance ratings) and look for unexplained differences in total compensation (salary, bonus, and equity) across demographic groups. Specifically, we look for pay differences based on gender (for which we have information worldwide) and, in the U.S., by race/ethnicity.
- Our analyses covered every job group with at least 30 Googlers total and at least five Googlers per demographic group for which we have data (e.g., at least five men and at least five women). These n-count minimums ensure statistical rigor (e.g., higher statistical power, narrower confidence intervals).
Unconscious Bias
The pay gap internal audits are probably a good idea for companies that are looking for data to support their claims that they have fair hiring and pay practices, but they are just good practice for companies that want to do the right thing. Gender pay disparity is a complex area and inequities can creep in without managers intending to follow unfair practices. Indeed, unconscious bias is likely a big factor.
Some critics say Google’s practice of topping up those it finds to be on the receiving end of unfair pay practices is a nice gesture, but it doesn’t address the underlying factors that lead to unfair pay in the first place. Joelle Emerson, chief executive of Paradigm, a consulting company that advises companies on strategies for increasing diversity, for example, told the New York Times that Google’s audit and balance strategy advances “a flawed and incomplete sense of equality,” since it doesn’t address the structural hurdles women face as engineers.
Others have pointed out that the audits also don’t examine what can be a flawed practice of how women and minorities are placed into levels when they are hired, which is also subject to unconscious bias. Google says it is working to address this problem as well. “This expanded review is the next step in our commitment to paying fairly. We’ll keep working to improve our practices and to ensure that Google is a great place to work for everyone,” wrote Barbato. 