In the quest to eliminate racial and gender bias in the workplace, pay transparency has emerged as a powerful tool. It’s a management innovation that mission-based organizations and non-profit job boards have been implementing for several years.
Now, pay transparency is also gaining momentum as public policy. As of 2023, California requires employers with at least 15 workers to provide salary range information to prospective and current staff. This follows adoption of similar policies in Colorado, Washington state, and New York City, and also abroad, like in the European Union.
This is welcome news, but there’s still progress to be made. Early trends from these states show some employers posting large pay bands, where the maximum salary is nearly $100,000 more than the minimum. This ambiguity does little to reduce racial and gender bias. Meanwhile, even the non-profit trailblazers in this space can sometimes struggle to implement these policies effectively.
As the policy becomes more common, non-profit employers can — and should — set the bar for pay transparency practices. What does this look like in practice? In 2021, my organization the Mozilla Foundation started sharing pay band information. This sparked an investment in undergoing a thorough review and update of our global compensation policy, a project led by our Chief Operating Officer Angela Plohman. Several months after the release of the new policy, she shared a detailed account of this project and its relevance to equity in NonProfit Quarterly. Our full executive leadership team learned a great deal along the way, and I wanted to share reflections as a member of the executive team supporting this initiative.
Take a ‘Change Management’ Approach
Most fundamentally, you should approach implementing a pay transparency policy as a significant “change management” process in your organization. It sounds obvious, but when we first introduced pay transparency, we thought of it as an “human resources process change.” As a result, both our executive and People + Culture teams did not fully anticipate the internal communication demands the change ended up requiring. For several months, the People + Culture team, along with our COO, spent a great deal of time sharing the details and context for our existing compensation philosophy. At this stage, many organizations who were unsure of their commitment to change may have backtracked. We stayed the course — and I’m glad we did.
If your organization follows a change management protocol, use it for this process. If you haven’t yet found or adopted one, this would be a good time for your organization to invest in this skill set.
Thoroughly Review + Commit to your Compensation Philosophy
If you are implementing pay transparency robustly, the information you provide will give current and future employees a strong sense of your compensation philosophy and administration. In turn, this information will raise questions you should be prepared to answer, understand and hopefully, fully support.
Organizational leaders and your People + Culture team should take the time to review and recommit to this compensation philosophy thoroughly. Are there parts of the compensation system that any of you don’t understand or don’t believe in? Have you heard rumblings of inequity or confusion among your teams? Now is the time to review your policies and procedures in detail, including the way they translate in real terms to your staff at every level and location.
In our case, members of the executive team had differing tenures at the organization and much different levels of familiarity with — and ownership of — our existing compensation philosophy. The organization had also experienced a significant growth in staff size, areas of expertise, and geographic representation. These changes resulted in emerging concerns about the “felt” impact of our compensation philosophy. For example, in some countries managers were making less than their direct reports due to our policy of using geographically-based “market rates” for salaries. Additionally, we had grown our staff of technical talent — like web developers and designers — without fully accounting for high-demand and relative salaries for these roles.
The seriousness and complexity of these questions led us to launch a global compensation policy revision, and leads to my next point.
Get it Right, Even If It Requires an Overhaul
Our initial steps toward pay transparency revealed concerns and gaps in our approach — enough that we decided to launch a significant review and revision of our global compensation policy. Now, nearly one year into the process, we’re close to launching the policy internally and beginning the implementation. And with this, we will begin a new round of change management.