Part 1: The Way You Compensate Impacts Your DEI Strategy

183:906269490 • October 23, 2023

Misconceptions about DEI that could be impacting your organization

There are a lot of thoughts and opinions on DEI, what it means, how it should be implemented, etc. As a sales compensation advisor, I have a unique perspective on DEI strategy as it both affects and is ultimately affected by sales compensation programs.

But before we can discuss this, it’s important to establish our understanding of DEI and how we’ll be using the terminology to apply it to sales compensation.

Diversity: This refers to the makeup of your workforce population and the amount of diverse backgrounds, including gender, race, age, sexual orientation, etc. The value of diversity comes from the expansion of different opinions, vantage points, and backgrounds to the mix of business actions and decisions.

Equity: This refers to the dispersion of opportunity, whether that be related to pay or accessibility of promotion. Equity is intimately tied to compensation program practices and processes throughout the employee life cycle.

Inclusion: This is the cultural element, referring to the way people feel in their organization, whether they feel included and treated fairly. The value of inclusion translates to the participation of a diverse population at all levels of the organization, and benefits include higher levels of engagement and belonging.

While there is no legal requirement for all organizations to be DEI compliant, many businesses and institutions recognize the importance of DEI initiatives in creating a fair, inclusive, and innovative workplace. It can lead to better employee morale, increased productivity, and a more positive corporate image.

While the benefits of DEI initiatives are clear, there are a lot of misconceptions about what exactly it means to be DEI compliant. Below are five common misconceptions that highlight the importance of building diversity, equity, and inclusion into the very DNA of your organization—the processes, systems, and documentation that you operate with.

Misconceptions about DEI

1. DEI is Just About Hiring Quotas: A common misconception is that DEI is solely about meeting diversity hiring quotas. In reality, a quality DEI strategy is focused on creating an inclusive workplace where all employees, regardless of their background, feel valued and have equal opportunities for growth and advancement.

2. DEI is Only About Race and Gender: While race and gender are vital aspects of DEI, it’s not limited to these factors. DEI encompasses a wide range of characteristics, including age, sexual orientation, disability, and more. A meaningful DEI strategy is about recognizing and valuing all forms of diverse thought and background in order to have a more thoroughly inclusive employee experience.

3. DEI is “Colorblind”: Some argue for a “colorblind” approach, believing that ignoring differences will eliminate bias. However, an effective DEI strategy promotes and celebrates the differences that make each individual unique. Striping away these differences through colorblindness can unintentionally perpetuate bias.

4. DEI is a One-Time Fix: DEI strategies and initiatives, by their nature, must be ongoing and adaptable. A large part of what constitutes fairness and equality is cultural, and culture isn’t a fixed concept. DEI initiatives must adapt and change based on the changing needs of the people in your organization. The effects of DEI on compensation are cumulative.

5. DEI is An HR Thing: DEI isn’t solely the responsibility of HR departments. For it to work, it has to be woven into the culture of the organization at every level, from leadership to individual employees. Organizations must embrace differences in order to remain relevant and have foresight to new and expansive futures.

DEI: From Compliance to Culture

There are a lot of pay equity and pay transparency laws popping up in the United States and around the globe, and organizations all over are scrambling to structure for compliance.

However, the organizations that will truly succeed and benefit from these efforts to make workplaces diverse and inclusive are the ones who build these values into their very culture. Compliance alone isn’t enough. You have to actually want a healthy, diverse workplace for all your employees.

To create that, you’ll need to look at the code your organization operates by—all documentation regarding pay, from your compensation philosophy to your sales incentive plans—more on this in my next post.