“People think inequality is okay” – What equal pay means

Human resources management: Ms. von Platen, on average women currently earn 16 percent gross per hour less than men. In 2016, the gender pay gap was still 21 percent. A positive development, but it only happens very slowly. Why is that?
Henrike von Platen: Equal Pay Day (which has existed in Germany since 2008, editor’s note) has brought important attention to the issue of fair salaries, but the structures behind pay have hardly changed for a long time. Attention alone doesn’t close gaps. It is important, but only effective if it leads to measurability, transparency and clear criteria. The way we drew attention to the wage gap may also have stood in our way.

What do you mean?
The term equal polarizes and creates a confrontation that often leads to defensiveness and justification. But sustainable change requires something else: the willingness to look into the system together. That’s why I use the term fair instead of the term equal. Fairness opens up a dialogue about what is perceived as fair and why – and it is precisely this dialogue that is a prerequisite for lasting change.

Is it already enough to change the term?
No, of course not. We have to move away from purely symbolic demands and ask ourselves questions about the system. Many years of focus on visibility and demands have shown: Without measurable criteria, transparent processes and clear responsibility, little changes. More and more people are having this realization. At the same time, knowledge about compensation systems has grown, as has the pressure on companies to be able to explain their decisions regarding employee compensation.

What system questions should companies ask themselves?
Important system questions include: What criteria is used to evaluate work? What factors influence salary increases or classifications and do they apply equally to everyone? How is performance defined and how transparent are these definitions?

The fact that companies ask themselves these system questions is rarely received by the public. There are also surprisingly few CHROs or managers who are vocal about the issue of equal pay. Why is that?
I believe this is the case because for a long time the issue was viewed primarily as a socio-political or communicative issue – not as a strategic management issue.

But why is it a strategic management task?
Compensation is one of the strongest governance mechanisms in organizations. It influences motivation, retention, career decisions and company culture. If payment is treated purely as an HR or communication issue, there is no strategic integration. Fair compensation is a leadership and governance issue – comparable to compliance, risk management or sustainability.

Are there other reasons for managers’ reluctance to participate in the public equal pay debate?
Yes, anyone who speaks publicly about fair pay must be prepared to talk about inequalities in their own system. This is uncomfortable and can quickly lead to blame. But that’s not the point. Fair pay is not a reproach, but rather a design task. Fair pay does not belong at board level as an image issue, but rather as part of responsible corporate management.

Could CHROs also talk less about compensation because they have encountered equal pay problems in their company that they have not yet been able to solve?
Perhaps. One thing is certain: many companies fail to consistently justify their compensation decisions. It should not be underestimated how deeply compensation systems are culturally and historically anchored.

What do you mean?
Salaries have grown historically, negotiations have been conducted individually, and criteria have not been clearly documented. At the same time, certain roles or activities are traditionally valued lower, even though they carry high levels of responsibility. In many places, career and compensation models are still designed for linear, full-time employment histories. Such patterns are rarely consciously decided; they are adopted. That’s exactly why they’re so difficult to change.

What can you do about it?
The most important lever is a consistent compensation system that applies to everyone, regardless of gender or other characteristics. Fair pay means that the factors that determine salary are the same for everyone and known to everyone. What these factors are can vary from company to company.

Can you give examples?
Relevant factors can be, for example, responsibility, task complexity, required qualifications or experience. What is important is not which factors are chosen, but rather that they are clearly defined, comprehensible and applied equally to everyone. Fairness comes from consistency, not from egalitarianism.

You work as a fair pay consultant. What company concerns do you most often encounter in your everyday working life?
The concern I most often encounter is that transparency could cause unrest. My experience is the opposite: a lack of transparency breeds distrust. Fairly defined and well-known criteria provide orientation for employees and managers. It’s not about creating a standard wage. We want to be paid and valued differently. People think inequality is perfectly fine as long as it is fair.

Lena Onderka is editorially responsible for the Employee Experience & Retention area – which also includes, for example, the topics of BGM and employee surveys. She also looks after topics in the areas of recruiting, employer branding and diversity. She is also the editorial contact for the German Human Resources Summit.