The following is the third in a 3-part blog series on the benefits of measuring Diversity, Equity, and Inclusion in your organization. Read part 1 here. Read part 2 here. This blog will explore 3 equity measures for businesses.
What is Equity?
A society is equitable when all people have the opportunity to participate, prosper, and reach their full potential, regardless of their demographics or identities. One way to achieve equity involves reducing correlations between characteristics (such as race) and measures of wellbeing.
In equitable organizations, factors that influence titles, compensation, rewards, and consequences are transparent, documented, and performance-based. These organizations strive to apply policies consistently and fairly. Ultimately, equity is present when each person’s group identity is not statistically predictive of their outcomes.
Why Use Equity Measures?
Equity is challenging to measure, so a place to start could be to measure perceptions. Do your employees perceive that your organization is fair? Do demographics play a role in differences in perception? If discrepancies exist, be transparent, commit to answering “why?” and create new measures based on the story you uncover.
Achieving equity and creating a fair workplace have clear business benefits. Equity creates a sense of stability, trust, and belonging. In this work environment, people are happier, more creative, and supportive of business objectives.
Below are three measures your organization can use to advance equity. These measures are not perfect, nor are they an extensive list of everything that can or should be measured. We recommend working to refine these measures to make them as helpful as possible.
Learn more about measuring DEI in your organization.
Download our free e-Book: DEI Made Measurable; Suggestions for Getting Started With DEI Measures Within Individual Organizations.
3 Equity Measures for Organizations:
Equity Measure #1: % of staff who believe they are treated fairly and with respect in the workplace
Perceptions of fairness are rooted in the concept of social comparison. Employees shape their perceptions based on comparisons to others they perceive as similar (Chan, 2011 and Tanner, 2020). They will judge the fairness of a workplace based on whether those who give similar “inputs” (dedication, performance, creativity) are getting similar “outcomes” (rewards, praise, treatment). Perceptions matter because they lead to behaviors that either support or undermine an organization’s strategic goals.
Employees that perceive an unfair workplace culture will behave in ways that they believe “level the playing field,” such as decreasing inputs, being dishonest, or simply quitting (Tanner, 2020). On the other hand, when employees perceive a workplace as fair, they become more engaged in their work, less likely to cause conflict, and more supportive of organizational objectives. Fairness also correlates with positive attitudes, commitment, and a willingness to work together and help others.
Measuring fairness and addressing negative perceptions is critical, as employee attitudes tend to exhibit a “multiplier effect.” One employee’s perceptions are likely to influence another’s, spreading either positivity or negativity where it may not have been present before.
Equity Measure #2: % of staff who feel their compensation (pay and benefits) is fair for their role, experience, and industry standards
When employees believe their compensation is fair, they and their organizations benefit in profound ways. In research conducted for the WorldatWork Journal, Rasch and Szypco (2013) found that employees who believe they are paid fairly experience health and psychological benefits inside and outside of work. For example, more than half of employees who thought they were not paid fairly said they experienced unreasonable work stress. In stark contrast, only 17% of employees who believed they were paid fairly said they experienced unreasonable work stress. So, fair pay practices may reduce and prevent work-related stress, even when workloads remain static.
Perceptions of fairness contribute to healthier workplace cultures. Fairness in pay is one factor that keeps employees engaged at work. More engaged employees are more productive and less likely to leave their jobs. This means less turnover and, ultimately, avoided costs for organizations. When employees understand the pay structure at their organization and feel included in decision-making, trust between employees and their managers (and amongst employees themselves) increases.
Equity Measure #3: % of external vendors owned by women, people of color, LGBTQ, veteran, disabled, etc. (characteristics listed are examples of what you may want to include – you may end up using multiple measures for each characteristic you want to look at)
Implementing supplier diversity does not have to cost more for organizations, and it may lead to increased profits. One study found that leading procurement organizations that adopted slightly higher supplier diversity rates than the average performer generated 133% greater returns in the procurement cost, driving $3.6 million more to their bottom line (Whitfield, 2008). Diverse suppliers can also increase drive innovation. According to Suarez (2011), “bringing new suppliers into the supply chain naturally promotes competition” and promotes innovation through the “entrance of new products, services, and solutions.” Women, people of color, and other groups can also bring diverse perspectives and knowledge to the table.
Diversifying the supply chain creates wealth in diverse communities, which increases spending power in those groups. This leads to more potential customers and more profit for organizations. When companies engage diverse suppliers, they are indirectly impacting the communities where those suppliers are based. According to Whitfield, economic growth in minority-owned businesses is important because it creates jobs in minority communities and helps build wealth among minority families.” This increases the spending power of these families, which can be a boost to the economy.
Learn More and Sign up for the One Year Measurable Equity Challenge
If you want to get serious about advancing DEI within your organization, Clear Impact Offers a One Year Measurable Equity Challenge.
Each month, we will send out a prompt for consideration and action with your team. We will also send educational resources and video tutorials to support their completion. One of these resources will include more in-depth research on the measures discussed in this blog.
You can complete all tasks at no cost to you or your organization.
Sign up: https://clearimpact.com/solutions/racial-equity/#challenge.
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