Kelley School faculty at IUPUI discuss Equal Pay Day

Today marks what is called “Equal Pay Day,” as organizations draw attention to wage differences between men and women in the workforce. It was started by the National Committee on Pay Equity in 1996, and held every April to symbolize “how far into the year women must work to earn what men earned in the previous year.”

The Indy Star reported this morning that Salesforce would be spending millions to help “close gender and racial wage gaps among its employees,” for the second year in a row.

If you'd like more information, Salesforce has an e-book on equality, and they posted a recent blog post about diversity and equality here. Here's even more information.

We asked a couple of our Kelley School of Business faculty members on the IUPUI campus their reaction to the latest news from the company.

“Salesforce should be commended for being proactive on this issue,” said Elizabeth Malatestinic, senior lecturer in human resource management. “The Equal Pay Act was passed over 50 years ago, and while progress has been made, women still have a long way to go to achieve pay equity. The issue can’t be legislated away, obviously, so corporate America needs to address it.”

“A popular argument against addressing the pay gap focuses on the concept that if you study men and women in the same position at the same company with the exact same circumstances, the pay gap goes away,” Malatestinic adds. “That may be true in many cases, but what that argument conveniently ignores is the opportunity gap for women. Plenty of women hold middle management positions but never get the opportunity to be promoted into the higher level, higher paying jobs. CNNMoney did an analysis that showed that only 14.2% of the top five leadership positions at the companies in the S&P 500 are held by women. That opportunity gap is a huge contributing factor in the pay gap.”

“It was monumental when Salesforce first did this last year. People keep talking about pay equality, but it’s hard to do,” said Kim Saxton, clinical associate professor of marketing. “There are a couple companies who have tried but haven’t had much success. Salesforce was really one of the first, most pre-eminent companies that said, ‘We’re going to gender-equalize pay.’”

“I think it’s great they reviewed that and updated it. On the other hand, why do they have to? Salesforce’s CEO told Fortune in January it was because they’d just bought other companies, so they would need to do another analysis on these new employees to erase unequal pay."

"I think this speaks to the difficulty in unconscious bias for companies across the world: We don’t even recognize we treat different people differently. Companies have been working to address that: Take for example, Facebook, who has been working on its hiring process in order to get more diversity into the workforce. The company dramatically increased its number of diverse applicants, and their numbers have changed slightly. McKinsey&Company started researching gender diversity in the workplace to figure out how to get more women in leadership positions. A number of businesses took an Equal Pay Pledge back in 2016 under the Obama administration. But there's so much more to be done."

Saxton points out that the group LeanIn.Org launched a campaign highlighting the fact that women are paid 20% less than men in the United States, with the hashtag #20PercentCounts.

"What Salesforce has done is an important step, and hopefully will serve as an example to other companies across the country and the world," said Charlotte Westerhaus-Renfrow, clinical assistant professor of business law and management. "Studies have shown women spend more money in our economy than men, purchasing much of what our economy produces -- in fact, one study shows women accounted for 83 percent of all U.S. consumer spending annually. If women were paid equally and fairly, they would likely put even more money back into the economy, thus growing an even more sustainable economy."

Westerhaus-Renfrow is an expert in negotiations, teaching the courses to business students at the Kelley School on IUPUI's campus and throughout the state at workshops and various functions.

"It's also imperative for both men and women to remember: you never get what you don't ask for," said Westerhaus-Renfrow. "Not all podiums are raised to the same height. Salary negotiations can be scary and daunting. In this article in the Indianapolis Recorder, I discuss the importance of understanding successful negotiation before meeting with your boss."

For the latest information on Salesforce's equal pay assessment, click here.