Luke Hohmann presented the following scenario the other day on LinkedIn—

If you’re wondering how you think about salary and fair pay, consider the following scenario I gave to my kids at dinner a few nights ago.

A white man and a black woman apply for the same job. They are equally qualified. During the interview process, the you ask the candidates for their salary requirements. The white man provides a number that matches the salary target established by your company. The black woman provides a number that is lower. If you hire the black woman, do you pay her what she requested or the established salary target?

It was fascinating to listen to the debate that ensued. One argument is that the company should maximize profits, so paying the black woman what she requested would be fair. A counter argument is that quite often minorities don’t know what they’re worth, so they often request salaries that are below market rates, and the company should pay the target salary.

Personally, I don’t feel that this is a hard choice. Leaders who have ‘power’ over such things as compensation should use their privilege to compensate people fairly.

I fully agree with Luke’s last point. There needs to be fairness and equity in compensation and there is really no excuse for shying away from it.

By putting on my agile leadership hat, I think of things like—

People are your number one differentiator
You need to be fully transparent
Equity and fairness send such a powerful message to x-functional teams
What we DO as leaders, really matters; more than simply words
We often make it harder to do the “right thing”, than it really is

Running through my mind as I read Luke’s scenario.

A quick story

Years ago, I was the senior leader at a company called iContact. As we moved down our agile transformational journey, I realized that the software testers were not compensated fairly with the software developers.

Now, this is a traditional skew, so I could have convinced myself that market dynamics were simply at play. However, I wanted to send a message to all of our Scrum teams that salary equity and fairness were important to me, to our leadership team, and across technology.

So, we changed the salary levels and compensation to reflect equity. The change was so drastic that HR found it difficult to find job ranges to match our intentions.

There were also people, for example, long-term employees and women, who were not fairly compensated as well. We also worked hard to change that over time.

We made our efforts fully transparent as well.

Wrapping Up

I’d encourage you to read the comments/replies to Luke’s post. While most align in the direction we’re discussing, there is some nuance amongst the replies.

A final point I’d like to make is that, at least in my experience, there is really nothing stopping leaders from making these sorts of decisions. Perhaps other than a desire to not disrupt the status quo or extend the political capital to do the right thing.

The point being—diversity, equity, and fairness are not hard decisions. It just requires awareness and intent to make a difference. At least IMHO.

Stay agile my friends,

Bob.