Diversity Considerations in Compensation: Part 2 – Workplace Currency, Manager Favoritism

This is an excerpt from our recent ebook collaboration with BambooHR entitled How to Turn Diversity Into a Major Asset for Your Organization. Download the full ebook here.

In our first diversity and compensation post, we covered how to identify and resolve inequities within your current compensation practices, as well as the pros and cons of a self-audit. Today, we’re talking about workplace currency and manager favoritism.

Bias and Workplace Currency

“Workplace currency” is a term we’ve coined at PayScale — much like the saying “money makes the world go round,” we see workplace currency as the grease in the wheels of the workplace.

Currency is the reason we get up and go to work in the morning. We (reasonably) expect to receive some sort of compensation in exchange for our efforts. So, just as an HR pro you want to ensure you’re being fair with compensation, you also want to ensure fairness in these other areas of workplace currency.

Favor is a particularly interesting element of workplace currency. One definition of favor is “unmerited like” — which is to say, favor has nothing to do with your performance in the workplace; it’s something someone grants you simply because they like you for you. And let’s be honest: When you’re the recipient of favor, it feels pretty dang good.

Someone could favor you because you have a common bond, or a similar sense of humor, or the same alma mater … It’s human to seek out people who are similar to us, and favor those with whom we have things in common. But when favor turns into favoritism, we have a problem. More on that in a bit.

Manager Favoritism

Manager favoritism manifests in managers (likely unintentionally) letting favoritism affect their decisions in things like hiring, pay increases, promotions, training and development opportunities and work assignments or projects. In terms of hiring, as we’ve covered, you want to make sure you’re hiring a diverse team, and again this really is for the benefit of the organization — you want to get that full richness that you can only get from a diverse group of people.

For pay increases, we’re seeing more and more companies moving to a metric-driven, clearly-articulated, performance-based plan, which is a nice way of taking favoritism out of the mix. Performance is pretty clear-cut — either the employee accomplished the goal or they didn’t. Not a lot of room for favoritism here. For promotions, the goal is to provide fair opportunities across teams, and for all people within the organization.

Work assignments are really important to look at closely, because we’ve found that especially with millennial employees, people are really concerned about doing work that matters. So within teams, you want to make sure managers are sharing the “good” work assignments. Sometimes when managers have a new project, they always go to the same person. If you find that, investigate. Is it truly about performance, or could it be about favoritism?

Look out for manager favoritism and imbalances in workplace currency in your organization. Getting these right is critical to ensuring a fair workplace.

Interested in a further deep-dive on diversity? There’s a lot more info in the ebook—grab a copy today!

Tell Us What You Think

Have you discovered favoritism at your organization? We want to hear from you. Tell us how you handled it, in the comments.

Image: Steven Lelham/Unsplash