I’m afraid I don’t understand your criticism of that citation. The companies used were drawn directly from the Fortune 500. If you’re criticizing the publication, as far as I know the Journal of Personality and Social Psychology is a credible, peer-reviewed publication. And for my part I copied neither the title nor the abstract.
~Max
And that is why that is not my main point, the point is that it is not true to assume that there is no positive correlation, not much, but it is not negative as many out there do assume.
But that shows one very likely source. (as it happened many times in discussions about climate change) When looking for harm it is more likely that there are very right-wing sources of info that pointed at that cite.
And as usual, the right wingers that pointed at that in reality did not look at the research, only the click bait title and abstract. The point here is that the research is likely valid, but not to show the harm of DEI, that research is more about what to do with management that is not doing things right.
The IJBPM paper doesn’t prove that either. I already noted upthread that the sort of management style I expect to be incompatible with diversity doesn’t scale well, so I think drawing from the New York Stock Exchange introduces a sample bias.
~Max
Uh, those are also big companies, so IMHO it is scaling well.
As a matter of fact, I found the citation when it was cited by Harvard Business Review, a source you evidently thought credible in post #2. Furthermore, I don’t care whether “right-wing” sources miscontrue the research because I’m the one making the citation. The “right wint” isn’t here to discuss with you, I am.
I’m confused. In post #2 you cited the business case for DEI. McKinsey & Co. is in the business of making the business case for DEI. Now I am arguing that making the business case for DEI is harmful. My argument bears directly on your argument - leave third-party management out of it.
~Max
Maybe you misunderstood me.
Take any given racist or sexist CEO/president, chances are he or she runs a small corporation and not one listed on the stock exchange. The vast vast majority (99.7%) of corporations are small operations. Once a corporation hits the big time, there is a lot of pressure from investors to drive out racism and sexism. But I only expect diversity to hurt a company’s bottom line when that company is very close-minded, racist, sexist, etc. Therefore by limiting a sample to the stock exchange I expect that sample to be biased towards a positive correlation between diversity and financial performance. The fact that even with this bias, there is no statistically significant correlation, is surprising but does not amount to evidence that diversity is never (financially) harmful.
~Max
Only that the paper you point out does not really do that (That DEI is harmful):
This paper raises the possibility that organizations may want to
refrain altogether from justifying their commitment to diversity. By
> this, we of course do not mean to say that they should avoid talking
> about diversity—rather, that organizations may consider simply
> stating their commitment to diversity as a matter of fact, that is,
> as something that requires no justification and is simply part of the
> organization’s core purpose. Alternatively, while using the fairness
case on its own may not be the perfect answer that people, including
us, may have expected (Bowman Williams, 2017; Edelman et al.,
2001; Kaplan, 2020; Trawalter et al., 2016), our findings suggest
that it is less detrimental than instrumental rhetoric.
After reading, it looks to me at pointing more to the reality that a number of companies are not really doing much, IOW, talk is cheap, but we knew that already. The real harm is to not do the change.
The Society for Human Resource Management, a professional for those of us in HR, has decided to drop equity in it’s DEI approach. I guess it’s just DI now. SHRM argues that there was too much confusion over what equity meant, was it equal outcomes or equal opportunities, but they feel it’s better to focus on diversity and inclusion because there’s more wide acceptance of it. The truth is that SHRM is giving up because of the political backlash DEI has been facing. They deny it, but I don’t buy their excuse of wanting to focus on DI.
It does leave some of us in a bind. My company made some efforts at DEI and we’ve stressed the improtance of those three little letters. We can’t very well just drop the E without an explanation, and I believe employees will see such a thing as evidence the whole thing was bullshit from beginning to end.
Even though my company pays for my SHRM membership, I’m going to consider letting it lapse. And I’ll let them know this is why.
Good choice.
Although, I do think the word “equity” is too uncommon to be generally useful. My first thought of “equity” is an ownership stake. And the second is a specialized court of law. But, really, it’s not like it’s hard to look up that “equity” means fairness in the context of DEI.
Of course it’s a good thing. Or are you advocating for Monoculture, Unfairness, and Exclusion?
Trading the article, the issue is not if DEI is a good thing, but rather the means of implementation are often improper for getting cooperation and engaged participation.
Telling managers the purpose is to reduce lawsuits and that they must comply doesn’t win converts.
Don’t use quotas, use active engagement of the underrepresented communities, and build mentoring. Work team-building exercises that allow people to interact so they meet others and see them as people, not demographics. Foster workforce participation and engagement to build ownership.
Resource groups would be people with experience dealing with the specific challenges that particular group faces. It might include mentoring circles that build supportive mentor relations especially with someone who has faced similar challenges. It might be advocates to ensure a hesitant new employee feels comfortable expressing their needs to management. Or maybe it is relocation assistance with language support and resources in the community like a list of religious organizations or community groups.
If the job requirements are the same, the pay should be the same. If the credentials or experience are relavent, than pay tires tiers should be established and transparent. “Seniority means more pay because duty levels are higher.” A person with more experience should be able to handle more difficult issues with less assistance, justifying more pay, within a reasonable amount.
Pay structures and benefits should be the same or within similar options at the employees option. Green emploees ask for salary X, but Blue employees ask for salary Y and stock options. If they are the same job, they should have the same options presented to them.
Equity of reaching the same outcomes means that people have the opportunity to achieve results. If there are measurable skills, it is okay to judge based on performance to some standard, but only if unfair hindrances are overcome.
For example, Frito Lay provides merchandise to my store, and merchandisers to stock the product. Their supply carts can be extended upward to reach 7 ft high. Our shelves my want overstock (resupply) on top, which is 8 feet up. Some of the Frito Lay merchandisers are barely 5 ft tall. So they get a ladder. We have ladder carts in the store for stocking top stock. Maybe they need a reach tool to aid in placent and retrieval of product. That’s equity. Not a job requirement one must be 6 get tall with orangutan arms.
Yes, equitable is a synonym for fair, but so is equal. But to implement “fair”, you have to define what you mean. What makes something fair? Giving all students Cs? That’s an equal outcome, but isn’t what is earned. Equtable means results that match effort, i.e. what is earned. But equitable workplace means providing tools that allow the possibility of equal results. Not artificially boosting scores or changing metrics, but tools so a person can do the work.
I see what you are saying, but DEI is an actual thing. The political right making it a bugbear is them repackaging anything liberal or progressive sounding into a bogeyman. “It can’t be a good thing of liberals want it. It must be about making white people feel bad or discriminating against them in favor of minorities.”
How is that contentious? Can you explain how you interpret that statement that it seems like a bad thing?
That’s not what equitability means. If the extra credentials mean something to job performance, then any pay differential should be spelled out by policy based on the improved results expected. If the credentials don’t mean anything to job performance, then pay is set based on the job, and applicants can take into account whether they are over-qualified or what their personal debt is.
That’s not a problem with the concept of employment equity, that’s a problem with idiots trying to define broad categories of equivalence. That’s unfortunately too common in big beauracracy. “This must be the same as that because I don’t know the difference.”
You’re a few months late to the thread, and some of the points you’ve made may have already been addressed. But I don’t remember anyone addressing this point, and it is something I’m still not clear on.
The analogy with the ladder allows a shorter employee the opportunity to perform the job. The outcome in that case is job performance. By giving disadvantaged employees tools to compensate for their disadvantage, we create the opportunity for equal job performance. I’m having trouble applying that ‘equity is a tool’ reasoning to wages. As I see it, the outcome of wages is take home pay (or more accurately the opportunity for a reasonable standard of living). But wages aren’t a tool like a ladder. An APRN who spends money on student debt is not ‘wasting’ an opportunity in the sense of a short person who doesn’t use a ladder to reach the top shelf. And equalizing wages for ‘overqualified’ candidates, or candidates who ask for more money because their background otherwise necessitates it (i.e. age, family), has the adverse practical effect of eliminating those employees entirely.
My experience when I managed a small doctor’s office is that we advertised for a CMA, EMS, LPN, and RN. Over time we had employees of all four backgrounds do the same job. (APRNs were considered physicians so that one would be considered a seperate job where the credential is highly relevant.) The job duties did not technically require any of these credentials, and credentials do not necessarily translate into experience for the position. There were minor benefits if the employee was an RN, such as we could call her “nurse”.
Since we were a small operation, and as is the norm for small independent medical practices here, we did not pay scale. There were various reasons for this, primary among them that we paid hourly wages and the boss had an inconsistent salary. I had one employee who asked us not to give her any raises because it would affect her Medicaid situation. If we paid all our clinical support staff on the same scale as RNs, in practice that would mean we’d pay none of them RN wages and we’d have no RN employees. We might have been willing to pay one RN, not five or six. Knowledge and experience are worth the premium but aren’t guaranteed by the credential, and besides, job requirements do not necessitate an RN. A transparent, unified pay scale that ignores credentials not relevant to job performance would probably scare off 80% of the job applicants, and it was a nightmare finding people already. More than once we would take any warm body.
The question is, what purpose would it serve? And it’s not just credentials. Consider a situation where you’re hiring a new sales rep. You have two candidates, one whose background (i.e. alma mater, employment history, personal relationships) boasts connections to potentially lucrative clients and another candidate whose background is already well represented on your sales team. The former candidate is asking for a higher salary which you think will be more than compensated by the value of his or her background, but all other things are equal. But you can’t give everybody a raise to meet that ask. How does DEI bear on this situation?
It seems to me the principles of DEI are conflicting. As I understand it, diversity would favor the candidate who brings diversity to the sales team, equity would favor disfavor unequal pay for identical job responsibilities, and inclusion would favor transparency with the applicants and the sales team however you decide. The contradiction, of course, is that without unequal pay (and probably opaque HR) you can’t afford the candidate who adds diversity to your team.
~Max
It’s not an overriding principle and more of something you do in the aggregate rather than for each individual position. You don’t hire a candidate because they’re a more “diverse” choice, whatever diverse might mean here, but because they’re the best candidate. Hiring them because they’re the most diverse might actually constitute discrimination which could get the company in hot water. You try other methods to increase diversity in the aggregate. You might start by making sure you’re hiring methods aren’t biased and if you notice there’s an underrepresented group you make efforts to make those groups aware when you have open positions.
As far as pay is concerned, it’s simply unreal to expect everyone with the same job title to be paid exactly the same. It’s fair, or equitable, to take into account the number of years someone has been with the company, education, experience, job performance, etc., etc. The problem is when you have two employees in the same position with similar experience and performance but you have one that makes a lot more than the other.
I remember going to an HR professional conference and the speaker said, “Your company isn’t in the business of employing people, it’s in the business of doing business.” i.e. Everything you do in HR is supposed to help the business do its business. In theory, DEI was supposed to help with employee engagement which would lead to lower turnover and attracting talent. i.e. It was supposed to help the company do their business.
Consider, say, that 70% of NBA players are Black, while only 12% of the populace is. That is definitely an unequal outcome.
In the abstract, one might reasonably say that it would be better if the racial makeup of the NBA more closely matched the US as a whole. But we aren’t talking just abstractions; we’re talking actual policy.
A policy of reaching out to underrepresented schools, for instance, isn’t a bad thing. But the NBA is big business and they probably don’t willingly ignore star athletes regardless of race. The light touch only goes so far.
So if you’re serious about correcting outcomes, you need a heavier-handed approach. That means, in effect, quotas. It might not be called a quota, but the net effect is the same. You lower the standards for the underrepresented group until you get the outcome you want. And, if needed, raise the standards for the overrepresented group. There is some standard of talent which will increase white representation in the NBA to the “proper” 62%, and lower Black representation to 12%. It will make the game awful and boring, but that’s the price you pay for equality of outcome.
Someone says no:
In a series of studies that are highly influential in the business world, McKinsey (2015; 2018; 2020; 2023) report finding statistically significant positive relations between the industry-adjusted EBIT margin of global samples of large public firms and the racial/ethnic diversity of their executives. However, when we conduct a quasi-replication of McKinsey’s tests using data for US S&P 500® firms as of 12/31/19, we find a not statistically significant relations between McKinsey’s measures of executive racial/ethnic diversity and not only industry-adjusted EBIT margin, but also industry-adjusted sales growth, gross margin, return on assets, return on equity, and total shareholder return.
the structure of McKinsey’s tests are such that by measuring firm financial performance over the four or five years leading up to the year in which they judge the race/ethnicity of firms’ executives, the default direction of causality that McKinsey capture in the positive correlation they report is that better firm financial performance causes firms to diversify the racial/ethnic composition of their executives, not the reverse.
So not only can’t they replicate the correlation (at least from later datasets), but they have likely reversed the direction of causality, since they measure financial performance over an extended period but the level of diversity at the end.
Of course, all of this should be expected. Believing a McKinsey study on DEI is like believing an RJ Reynolds study that says nine out of ten doctors smoke Camels.
The McKinsey study was not peer reviewed or done in any kind of fashion that resembled an academic paper. The review above is only a “quasi-replication” because McKinsey would not release their dataset. That alone makes it worth ignoring.
However, I should point out that McKinsey is really one of the most abhorrent companies on the planet. Consider, for instance, the report they did for Saudi Arabia helping them to target dissidents:
Jamal Khashoggi–the journalist the Saudis murdered–was a friend of one of the targeted influencers.
Or, consider the report they prepared for Johnson and Johnson on how to increase opioid sales:
They did the same for Purdue Pharmaceuticals on how to increase OxyContin sales:
They are a fantastically evil company. Of course, by itself that is not evidence that their diversity report is wrong. The lack of replication is evidence of that. But their utter lack of ethics is evidence enough to not give them the slightest benefit of the doubt on anything.
Nonprofits have the added concern that how much is spent on admin vs services is tracked. I’m not sure where salaries for crisis staff fits, but seems it would be overhead, not services. Money or benefits to clients is what rates a non-profit. Certainly funding actual staff looks better than higher salaries to execs.
There is truth to that. The challenge is how to package the idea for companies that aren’t already set up that way and show them how to do it. Ultimately it only works if the leaders actually embrace the messege and intent, rather than the format and taking points.
With regards to the medical staff, the question is whether it is fair (equitable) to vary pay by education when that extra education isn’t super relevant to the job. A medical assistant can have a high school education, but many have college degrees. An nursing diploma can be a 2 year deal, but many go for the BSN which is a four year degree. The most experienced and high performing medical assistant will not break through $30/hr. An RN fresh out of school will demand at least $35. Most with experience will ask for substantially more. Yet we actually did hire an RN with experience working in our specialty - still significantly less than some of our other staff, but more than other candidates. Diversity wasn’t a consideration. It’s just a given that an RN will make more than an MA. “The job requirements are the same”, as Irishman notes, but the pay was most definitely not.
As for diversity the obvious note to make is that these kinds of medical staff are overwhelmingly women. I would say ten to one, easily. Most of the male applicants were EMTs looking for a side gig when not on call, which didn’t work with our rigid office hours. Even in that group males were a minority. (We ultimately hired four EMTs as medical assistants while I was working, one male and three female.) We did not make any special effort to reach male candidates and I don’t think we should have. It was important to try and have at least one female employee because the doctor was male and you prefer a female present for physical exams, but this was more of a consideration when dealing with coverage. It didn’t factor into the hiring process. The outreach strategy usually consisted of an Indeed ad, me calling every applicant and, if they met the requirements in the ad, offering them an interview. We weren’t really operating at the scale where we could target specific groups.
~Max
I counted 2 or three logical fallacies in your post already. About the Straw man: the point I was making was that the Mckinsey report said that DEI offered positive results. And I did humor the the results of the critical study, that declared that there was no significant gain. (Of course then using just one study and make it to be the final word is silly and fallacious too, but I continue the humoring because that was not my point).
As a veteran of climate change discussions it is really underwhelming that you go for the spin that conservatives give to the critical study and declare that businesses taking DEI into account is not good. The point was that taking the critics study and the studies in favor of DEI (and not just McKinsey) I then thought that overall, while DEI could not offer significant advantages, it does not offer significant disadvantages either.
I would follow what the critics reported afterwards:
McKinsey & Company’s previous studies, which reported a positive relationship between diversity and financial performance, were also scrutinized. The researchers argue that McKinsey’s results may show that profitable firms can afford to focus on diversity rather than diversity driving profitability. Green and Hand’s separate project failed to replicate McKinsey’s findings for the S&P 500.
Despite these findings, Bermiss emphasizes that the research should not be interpreted as an argument against hiring diversely. He acknowledges benefits of workplace diversity unrelated to profitability and suggests that companies should be clear about their motivations for diversity policies.
I should point out that the spin offered by the right is what is evil. They, like with the climate change issue are willfully ignoring the externalized costs that a lack of diversity in the corporate world does lead to in systematic ways.
But the reality IMHO is that harm has to be demonstrated before DEI efforts in the corporate world should be dismissed. Or that critical studies against the ones from McKinsey means that the right is correct on this one when more research is needed to dismiss other research that does take into account the externalized costs of not even allowing what in reality is just a recommendation. This is more noticeable when the right was successful in removing Affirmative Action as a tool to improve the systemic racism that is out there in the corporate world too. Not even a recommendation (as mild pressure) to do good in our society, like DEI, is allowed to develop in the right wing world.
Yeah, I noticed that. Oops.
First let me caveat I’m not an expert. I don’t do hiring and don’t know law regarding salaries and wages. I’m just a guy who is trying my best to understand what DEI is about.
So, for example, you mention of an APRN is paid more to pay off their debt, that’s not wasting money. I never said it was, and I think you are misinterpreting the salary/ wages equity issue.
As @Odesio said, wage equity isn’t really measured against individuals, but rather in the aggregate. Every individual has different characteristics, experience, certifications, talents, even efficiency and dedication. It’s not equity to give everybody the same annual raise. If one person shows up, works the expected amount, but doesn’t go out of their way to be fast and do quality work, why should they get the same as a star performer who is always there, works extra hard, takes on challenges, and takes pride in the outcome of what they achieve?
In the situation you mentioned, a small medical office, wages can vary to take into consideration all the variations you mention.
My points about wage clarity are more for larger businesses that have hundreds of employees. Having a transparent pay system assures people have the same opportunity. It’s about transparency for trust. If some people are paid more than others doing the same job, it can look like favoritism unless you have objective criteria that can be shared.
In your small office, the duties may technically be the same, but the different qualifications can justify different compensation. The point is that the reasons for different pay are reasonable and above board.
For a large company, you can look at averages and job categories against pay and see if minorities are consistently paid less. If so, that alerts you not only to a need to adjust some pay, but to take a look at why those pay discrepancies exist.
Equity isn’t necessarily easy to explain, but it’s just about being fair.
Example: my store’s company was having trouble with hiring quality candidates for specific positions, like overnight stocking, bakery, and online grocery fulfillment. So they put a premium pay in place for those jobs, with concurrent expectations and performance measures. Well, the cashiers on the front end didn’t get those raises, and it felt unfair. Especially to me, who as a manager was now making less than those other associates. But the rationale for emphasizing those roles was objective and clearly stated.
But it was frustrating for front end associates when they were asked to fill in doing the same duties as the higher paid associates, but their pay wasn’t bumped even in a prorated manner. That was really frustrating when I had to fill in doing online grocery and still making less than the nominal crew. It so happens that the company eventually came around with raises for the front end, because the impression made those employees feel undervalued. That’s not equitable.
The hard part about DEI isn’t the concept, it’s metrics - how do you measure that you are being equitable, that outreach is working, that inclusion is more than a buzzword. That’s where notions of quotas arise. Because when a situation is consistently inequitable - especially for historical social reasons - it may become necessary to actively intercede against those historic inequities.
But that becomes problematic because any individuals now being affected negatively didn’t earn that negative impact themselves. But they are the beneficiary of the original system, so maybe fairness means that someone else gets the unfair boost this time.
How do you level the playing field?
Suppose you’re playing table hockey, fir money because his rules, and the table slants back toward you. During the course of several games, the opponent has racked up a sizeable lead. Okay, he finally reluctantly agrees to raise your end level. Proceeding from their, you may now have an equal chance to score, but you are still way behind. You’ll still be the loser for the night, even if every game after is fair.