In a new blog post, Google says: “Compensation should be based on what you do, not who you are.” Its annual pay equity study tries to put this belief into corporate practice, and this year (the largest study to date) it found a lot of men on the short(er) end of one salary spectrum.
As the blog post also notes: “In 2018, we included 91 percent of Googlers in our analysis, the highest percentage to date. We provided $9.7 million in adjustments to a total of 10,677 Googlers.” Broken out equally, that’s roughly $908 in income adjustment per Google employee. Why all the salary tweaking? The post digs into it further:
There are a couple of reasons that the pay equity analysis required more adjustments in 2018, compared to 2017. 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. 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.
In the study’s accompanying methodology, Google describes “discretionary” money as something that allows managers to boost employee income as they see fit. “Managers are given an extra pool of money, known as discretionary budget,” reads that breakdown. “They can use it to adjust modeled amounts to account for factors like pay relative to peers and trajectory. If managers change a Googler’s proposed salary, bonus, or equity refresh, they must provide rationale.”
Google appears to be placing some blame for the male-centric pay discrepancy on Level 4 Engineers, or at least those managing them. It’s a big job code, as the company noted, and a lower-level engineering role to boot. According to job role comparison site Levels, only the L3 designation is below it (for engineering roles, at least).
Levels’ crowdsourced salary information shows engineers at the L3 level often have relatively little tenure at Google, suggesting it’s a role meant for graduates. In a 2017 lawsuit, former Googler Kelly Ellis said she was hired as an L3 despite having four years of experience after graduation, and alleged that a male with the same experience was hired as an L4, which garnered him a better salary, bigger bonus, and more stock options.
In its pay equity blog post, Google added: “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.”
Without saying as much, Google seems to be hinting that some percentage of women were hired at a lower level than appropriate, which caused their managers to use discretionary funds to soften the blow to their paychecks. As a result, those women – who may have been hired into a lower job category than they should have – were earning more than men in the same job designation. Because of this tweaking with discretionary funds, a category of male engineers are now slated for adjustments. The attempt to fairly balance salaries continues.