With the proliferation of social justice across various platforms worldwide, many businesses are now attempting to implement pay equity in their compensation structures. However, as a business owner, you have more options than simply implementing pay equity plans for your employees. Instead, consider incorporating anti-oppressive pay into your framework for determining employee compensation.
Kate Dixon established Dixon Consulting, a certified B corporation on leadership development and total rewards consultancy. They specialize in compensation solutions, service pricing advice, and salary negotiation coaching. Here are some insights on compensation structures with an anti-oppressive framework based on Kate's CEO journey.
Differentiating Anti-Oppressive Pay From vs. Pay Equity
Pay equity, also known as equal pay for equal value, is mandated by federal and state laws. These laws require that employees who do the same work receive the same benefits regardless of race, ethnicity, sex, gender identity, or other factors. Pay equity laws tend to focus on compensation itself and salary adjustments.
However, abiding by those laws means that some businesses compare employees who shouldn’t be compared, or only follow the laws by the letter. In a performance-based compensation structure, behavioural standards can be perceived differently between the different sexes. For example, the traits admired in a male leader may be misconstrued as unfavourable in a female leader, which can impact salary adjustments for female employees in the workplace.
Additionally, anti-oppressive pay goes beyond compensation and into the root causes of pay inequality. This approach aims to remove or lessen the biases that, whether intentionally or inadvertently, many systems have that impact compensation structures within companies. These systems can be social or educational.
As Kate puts it,
“When you really peel things back, we realize that oppressive systems really do impact all of these different factors that determine individual pay.”
How to Start Implementing Anti-Oppressive Pay
1. Conduct a Diversity and Inclusion (DEI)Assessment
Before adopting any change, it is critical to evaluate where your business is regarding the issue you are attempting to address. In this case, how is your company fairing concerning DEI?
There must be a clear understanding of systemic oppression and the necessity to break free from it to implement anti-oppressive pay.
2. Determine Your Goals
Next is setting the goals you want to achieve with your compensation structure. Ask yourself, "What do I want to accomplish with an anti-oppressive pay?" Some goals might be:
Transparency, like how transparent you want your compensation structure to be to your employees
Number of levels such as how many many you want in your organization
Functional differences such as how you can express the differences with the number of levels you have
Who can access the compensation programs, like C-suite employees or everybody in the organization
When it comes to transparency, the right level of it depends on your organization. It also goes hand-in-hand with employee education. It is vital that your employees understand the salary ranges and how promotion works within your company so that transparency can contribute to anti-oppressive pay.
As Kate explains,
"I also think, for my clients who have not been transparent, it's not like a switch, right? It's not either everything is transparent or nothing is transparent. It's like a dimmer light. You want to be thoughtful about how much light you bring into the process, because transparency also means education, right? People need to understand, you can't just go 'Okay, well, this is what everybody makes.'"
3. Use the Market
Market data does not have to drive everything about functional differences in pay equity. But you can use the market to benchmark the changes you’ll implement in your compensation structure.
You can also use market data to pick out where you'll be departing from to adopt anti-oppressive pay. Even something as simple as departing from individual-based pay is a departure from standard market structures.
Balancing Compensation Structure and Profitability
There’s a misconception that implementing anti-oppressive pay or ensuring pay equity means sacrificing profitability.
“Not everything about anti-oppressive pay costs more. Taking the individual performance out of pay, you can do that and keep your budget, completely neutral. Transparency, you can do that and keep your budget completely neutral. Many of the other things do require a shift, but some of them just don't cost anything. Some of them cost minimally.”
It all comes back to these two things:
Vision — how do you want to see your employees treated?
Intent — how committed are you to executing this vision?
Review your business model and see where you need to make changes to achieve the revenue that will enable you to provide higher salaries and better benefits programs for your employees. Taking measures against oppression doesn’t necessarily have to mean losing profitability — what you’ll be doing is instead ensuring that every employee receives appropriate compensation while still maintaining a profit. All you need to do is balance your numbers.
It’s best not to see a just compensation structure as a profit loss, but instead as an investment — you are investing in your company’s most powerful resource: its people.
There are many things you can do to adopt anti-oppressive pay, and the truth is: most of them don’t cost anything. Most of the cost is a mental investment into the time and effort required to utilize a new compensation framework.
Remember, you do not have to go "all-out" when starting to implement anti-oppressive pay in your compensation structure. You can take small steps in investing in anti-oppressive pay. What's important is to get the ball rolling in reframing your compensation structure to lessen the oppressive systems existing in your company.
Some Strategies for Adopting Anti-Oppressive Pay
1. Organization-based Performance
Organization-based performance is a good option instead of determining employees' compensations based on individual work performance. It helps eliminate or lessen biases against specific demographics within your business.
This approach also emphasizes the contribution each employee plays a part in the organization's success. Under this, people will get the same amount or percentage based on the entire company's performance.
Similarly, profit sharing eliminates or lessens the biases that factor into individual performances regarding incentive plans in compensation structures.
3. Minimizing Levels
It is impossible to remove levels with a company completely. However, you can decrease the number of levels within your organization to lessen or decrease the oppressive structures. Some common biases include:
White men tend to receive white-collar jobs, like management roles.-collar jobs such as management jobs tend to be given to white men
POCs usually get blue-collar, technical jobs
Women often get shunted into caregiver, assistive, or service roles
As Kate points out,
“I think there's a myth about individual performance that one person can be successful by themselves, and everybody else doesn't matter. I just don't think that's true. It takes the entire team even to support, like a brilliant designer, or a rockstar salesperson. The entire team is conspiring for that success. To not base pay based on what the entire team is doing, really, negates the contributions of everybody. But I think that you can do things like not express differences functionally.”
It’s essential to recognize fewer levels that can express the differences in the work your employees do.
Kate’s Advice to Entrepreneurs
We need to go beyond simple pay equity. Adopting anti-oppressive pay is all about your intentionality as a business owner. Every act you take as a business owner should have a reason behind it. It includes intentionality in:
Pricing your product or service
Treating your employees
These areas are integrated. Katie lives by these words,
“It shouldn't just be left to happenstance—you should make these decisions consciously and well, in order to lead your business to where you'd like it to go.”
Implementing equity pay shouldn't just be to comply with federal and state laws; it should go beyond paying your employees equally for equal work. There must be conscious decisions on creating a workplace with anti-oppressive pay.
Remember that adopting an anti-oppressive approach doesn't have to cost more. It’s not a cost you incur as a result of ensuring your people receive compensation — it’s an investment into your company’s primary resource. Adopting anti-oppressive pay is simple: look at the current structures you have and make changes to ensure true pay equity. Take that step.
As Kate says,
"The bigger ‘cost’ is the mental investment, the commitment to diversity, equity inclusion, that is required to kind of reframe the work that they're doing, and that's a lot more rare.”
If you want to know if your pricing is correct and whether it can lead to your growth, a CFO can help you figure out your next best move. Understand what fair yet competitive pricing entails and how it plays a critical role in your business with the help of a finance team. Schedule a discovery call with Profit Reimagined™ to help you cover your foundations and deepen your understanding of these concepts.