Eliminating Unconscious Biases

While the intention behind compensatory hiring is laudable, it can also lead to biases in the hiring process that perpetuate pay-parity issues in the workplace. For instance, hiring managers may have unconscious biases that cause them to undervalue the skills and qualifications of candidates from certain demographic groups, leading to lower pay offers. Additionally, compensatory hiring can result in a situation where some employees are perceived to be hired for reasons other than their merit, leading to resentment and decreased motivation among other employees.

Addressing biases in compensatory hiring is essential for promoting pay-parity and creating a more equitable workplace. However, biases in compensatory hiring practices can contribute to pay-parity issues, perpetuating disparities in earnings between different demographic groups. Ashissh Kapoor, Director - Human Resources, EY India, had some pertinent points to share on this issue.

Key highlights

Research indicates that biases in negotiations can lead to differences in starting salaries, disadvantaging certain groups. Studies have shown that women, for example, are more likely to face challenges in negotiating higher salaries compared to men, resulting in lower initial pay. These biases can perpetuate pay disparities, as starting salaries often serve as the foundation for future salary increases and promotions.

Biases stemming from stereotypes and perceived value can influence compensation decisions. Certain roles or industries may be associated with specific gender, racial, or ethnic stereotypes, leading to devaluation of individuals from under-represented groups. This devaluation can result in lower salaries or fewer opportunities for advancement.

Research suggests that biases related to gender, race or other characteristics can influence how individuals are evaluated, potentially leading to unfair assessments and subsequent disparities in pay.

Individuals from under-represented groups may face obstacles, such as bias in selection processes or limited access to networking opportunities, which hinder their progression within the organisation.

Road ahead

Addressing biases in compensatory hiring is crucial for achieving workplace pay parity. Biases that emerge during salary negotiations, performance evaluations, promotion decisions, and lack of transparency all contribute to pay-parity issues.

Organisations must prioritise mitigating biases by implementing fair and transparent compensation practices, conducting regular pay audits, providing training on unconscious bias, and promoting diversity and inclusion throughout the organisation.

By actively addressing biases in compensatory hiring, organisations can work towards creating a fair and equitable compensation structure that ensures equal opportunities and fair pay for all employees, irrespective of their gender, race or other demographic characteristics.