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What Did Google Actually Find Out About How It Pays Women and Men?

Illustration for article titled What Did Google Actually Find Out About How It Pays Women and Men?
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In 2017, Google was accused of gender pay discrimination by the U.S. Department of Labor. Later that year, Google employees conducted their own informal salary review, finding that women were paid less than men. In January of last year, several women filed a class-action lawsuit against the company, alleging it underpays women. Which is why a New York Times story on Monday titled “Google Moves to Address Wage Equity, and Finds It’s Underpaying Many Men” was surprising. And, ultimately, misleading.

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The story concerned the findings of Google’s 2018 pay equity analysis, which looked at 91 percent of employees. Compared to 2017, when Google spent $270,000 on 228 employees to correct systemic pay inequities, the company spent nearly $10 million on over 10,000 employees last year. In a blog post on Monday, the company attributed this bump, in part, to one specific job code: Level 4 Software Engineer, a particularly large category in the company. (A Google spokesperson couldn’t specify exactly what percentage of workers the job code represents, but parent company Alphabet said it employed 98,771 people at the end of 2018.)

“Within this job code, men were flagged for adjustments because they received less discretionary funds than women,” the company said. To conclude from this that many men at Google are underpaid is an oversimplification. As Google mentioned in its blog post, an employee’s compensation is algorithmically-generated. From there, managers are able to increase an employees’ salary, bonus, and/or equity through discretionary funds. Among Level 4 Software Engineers, more women were given these additional funds than their male counterparts, so Google adjusted for men in this category.

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This doesn’t tell us whether men, women, or any other groups in any other job codes are paid less at Google, it just indicates that in this specific job code, which comprises a substantial (but unspecified) percentage of the company, the discrepancy in discretionary funds allotted to women was statistically significant enough for Google to adjust it in favor of men. We still don’t know why women in this job code were receiving more of these additional funds, but there are plenty of reports indicating why that may be.

“Our pay equity analysis ensures that compensation is fair for employees in the same job, at the same level, location and performance,” Google wrote in its blog post. “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.”

A Google spokesperson confirmed that they don’t know yet why managers gave more discretionary funds to women in this job code, which is why the company is undergoing a more thorough review, to better understand how things like leveling might be connected to the discretionary funds. The class-action lawsuit filed by former Google employees in 2017 alleged that Google systematically pays women less than men performing similar jobs, while also keeping them in lower-paying and lower-level positions. The lawsuit also alleged that men are promoted more often than women who are just as qualified.

It’s possible that women in this job code should have been promoted to a higher level position. As we saw in the class-action lawsuit, this isn’t a novel claim. And if that is the case, Google isn’t achieving pay parity by subsequently giving bonuses to their male counterparts—they are simply reverting to a pay gap that was being corrected through discretionary funds.

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We don’t know the motivation behind the significant allocation of discretionary funds to women in this job code, but Google promises to conduct a more thorough review looking into it. We also don’t know what kind of pay disparities, if any, Google found elsewhere in the company, though the company said that 49 percent of this year’s adjustment dollars corrected “discrepancies in offers to new employees.”

What we do know is that conflating these adjustments for men with the conclusion that men across the company were underpaid is misguided, and without more transparency, it’s impossible to know for certain what inequalities exist in this workforce—or any other.

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DISCUSSION

“It’s possible that women in this job code should have been promoted to a higher level position.”

It’s also possible that managers are working to keep their gender diversity numbers up by working hard to retain their female employees... There are lots of possible causes for this observed effect.

I’d certainly be curious to know what things look like at other job levels and for other clusterings (e.g. ethnicity, sexual orientation, seniority, etc.).

Note: L4 is SWE III, roughly equivalent to L5 at Amazon (SDE II), ~62 at Microsoft (SDE II), E4 at Facebook. It’s the staple position of software engineering in the valley, the first level-up/promotion 2-5 years after starting professionally, and the first career top-out position (i.e. one can spend an entire career at that level in the valley and not necessarily be a trajectory red flag, which is not true for L3 and *more true* for L5).

The plurality position on software teams at most of the big companies is the equivalent to this position, so it’s fair to look at it as a big mover for organizational bias.  I’d like to take a look at the whole picture for the org, though.