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Every year Google conducts an annual pay equity analysis to determine whether employees are being equally paid for similar jobs regardless of their gender or race. Yesterday, it shared a blog post based on this analysis, according to which men were being paid less than women in one of their job level.

Google says that with this annual analysis it aims to make the modeled compensation amounts and any changes to it by managers equitable across gender and race. Any significant discrepancies found in any job groups are then addressed by upwards adjustments across the group.

What Google’s pay equity analysis revealed?

Google’s paying plan consists of three pay elements namely salary, bonus, and equity refresh. The analysis did not talk about these three pay elements. The compensation is based on an employee’s job role, performance, and location. Additionally, managers are allocated an extra pool of money, which is called a discretionary budget. Managers can use this budget to increase pay elements of individual employees.

The analysis highlighted that this compensation discrepancy of Level 4 engineers happened because managers were allocating more discretionary funds to women than men. “First, the 2018 analysis flagged one particularly large job code (Level 4 Software Engineer) for adjustments. Within this job code, men were flagged for adjustments because they received less discretionary funds than women,” wrote Lauren Barbato, Lead Analyst for Pay Equity.

As an adjustment to this discrepancy, Google provided $9.7 million to a total of 10,677 employees, though it is not clear how many of those employees were men. A major portion of this adjustment fund (49 percent) was spent on discrepancies in offers to new hires.

Google notes that the number of adjustments has risen dramatically as compared to 2017, which was only 228 employees. It says that this is because 2018’s analysis covered up to 91 percent of Googlers including new hires. “Secondly, this year we undertook a new hire analysis to look for any discrepancies in offers to new employees—this accounted for 49 percent of the total dollars spent on adjustments,” reads the blog post.

This report just came at a time when Google is facing lawsuits for gender pay discrimination

Google and other tech giants, in general, have been increasingly under public pressure to address gender bias at the workplace. Back in 2017, Google was sued by three ex-female employees saying that the company was discriminating female employees by systematically paying them less than men for similar jobs.

One of the plaintiffs in this lawsuit against Google, Kelly Ellis, mentioned that she was hired as a Level 3 employee despite having four years of experience. Needless to say, she was surprised when she read about Google underpaying men and quickly correcting their compensation to maintain “equity”. She tweeted:

Dylan Salisbury, a Software development manager at Google, shared in a tweet that even though he raised a concern about Google’s gender pay discrimination, it was not really taken into account:

The Level 3 category is for new software engineers who have just graduated. She further revealed that a few weeks later a male engineer who, similar to Ellis, had graduated four years back was hired as a Level 4 employee. According to the suit, other men who had the same level of qualifications or even less were also hired as Level 4 employees.

Jim Finberg, the lawyer representing the female employees, says this report, in fact, contradicts expert analysis of the company’s own payroll data. Under the lawsuit, the plaintiffs are demanding justice for about 8,300 current and former employees. Finberg in an email to WIRED said, “It is very disappointing that, instead of addressing the real gender pay inequities adverse to women, Google has decided to increase the compensation of 8,000 male software engineers.”

Along with the lawsuit by the three ex-female employees, in the same year, Google was sued by the Department of Labor because it refused to share compensation data needed for an anti-discrimination audit. Later on, the department found out “systemic compensation disparities against women pretty much across the entire workforce.”

Google supposedly shared this report because it was counter-intuitive. Sharing select findings in the report led to a lot of misinterpretations showing that either Google didn’t have pay equity problem or even if it had they have overcorrected it. As the company itself admits in the post that this analysis is not adequate, it could have waited until the more comprehensive review is complete. Or, instead, it could have just shared the full report or the raw data for the public to see, as sharing a part of the results does not show the context.

The pay equity analysis only compares employees in the same job category so it does not really show the bigger picture. The results do not reflect race or gender differences in the hiring and promotion processes. Further, in the blog post, Lauren Barbato mentions that in addition to this pay equity analysis, Google will be performing a more comprehensive review of leveling, performance ratings, and promotion processes. It will also be analyzing how employees are being leveled when they are hired. “Our first step is a leveling equity analysis to assess how employees are leveled when they are hired, and whether we can improve how we level,” says the blog post.

One of the Google employees shared in a tweet that women were being paid more discretionary fund because they were systematically being under-promoted:

Amid all this backlash, people were also supportive of Google’s decision. A Redditor commented, “So Google found out it was underpaying more men and hence gave men a higher raise pool? Sounds like they found a problem and took steps to fix it.”

To read Google’s announcement, check out their blog post.

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Bhagyashree R