What Does Equity Mean In The Workplace And How To Improve It?

Context is everything when it comes to certain words in business. Their meaning can change dramatically depending on who you ask. What does equity mean? For someone in accounting, equity refers to ownership interest or something of financial value. Others think that equity is just another word for equality. But in reality, the concept of equity in HR is something different altogether. This article will explore the basics of equity and the ways in which leaders can promote it in their organisations.

What Does Equity Mean In HR?

Equity and equality are related but distinct concepts in theories of fairness and justice. Equality is all about giving the same treatment to everyone, without discrimination or bias. It is based on the (often inaccurate) assumption that fairness means creating a level playing field for everyone, regardless of their individual circumstances.

Conversely, equity is based on the belief that individuals are NOT equal in reality. People are born under different circumstances, have different needs, and face different kinds of disadvantages. The playing field is not level to begin with. Instead, you have to create the optimal conditions by providing each individual (or group of individuals) with support that helps them overcome their disadvantages.

Take the example of employee parking and building access. Equality would mean providing a car park without any reserved slots, and a single entrance with stairs to access the office building. But what if your staff includes persons with disabilities? Equal treatment would leave them at a severe disadvantage in this situation.

Equity would involve keeping reserved parking spots close to the office entrance for such employees. And along with stairs, you will also provide wheelchair-friendly ramps and lifts to ensure that all employees can reach their workplace without any difficulties. Similarly, equitable policies can be used as part of your organisation’s DEIB+ strategy to combat workplace inequalities based on factors like gender, sexual orientation, age, race, and religion.

Why Equity Is Important In Indian Workplaces

Despite increasing awareness, Indian workplaces are still severely lacking when it comes to issues like equity and inclusion. Gender imbalance is a major issue in India, with women's representation in the workforce ranging from 30 per cent in IT to just 5.5 per cent in FMCG sectors.

A PwC India Workforce 2022 survey highlights that over 75 per cent of female respondents were very concerned about being overlooked by their managers for career advancement. Worse still, an overwhelming 89 per cent of LGBTQ respondents echoed similar concerns about career advancement.

The same survey indicates that 34 per cent of employees in India are very likely to switch to a new job due to dissatisfaction with their current workplaces. This is nearly twice the global average of 19 per cent.

Gender pay gap is also a major concern. Although things have improved over the recent decades, equity in pay is still some distance away. The latest figures from 2018-19 indicate a gender pay gap of 18 per cent in India. 

Of the 3 crore individuals living with disabilities in India, only 30 lakh are able to find gainful employment. And less than 25 per cent of Indian workplaces have the basic facilities to accommodate disabled employees.

5 Ways Leaders Can Improve Equity In The Workplace

The path to an inclusive and equitable workplace starts at the top of an organisation. According to the Harvard Business Review, the impact of a capable leader with the right mix of qualities on workplace DEI initiatives can be as high as 75 per cent. The HBR article identifies humility, commitment, and empathetic leadership as the essential qualities.

1. Actively Seek Feedback From Diverse Employees

Managers often fall into the common trap of surrounding themselves with subordinates and advisors who share similar traits, backgrounds, or interests. This kind of similarity bias can make you blind to issues of exclusion and discrimination in the workplace.

To avoid this, leaders will need to actively try creating advisory teams that accurately reflect the diversity in the workplace. This will give the leader access to new perspectives and insights into the workplace conditions of employees from different backgrounds.

2. Conduct Equity Reviews Across The Employee Life Cycle

Individuals routinely face bias and discrimination throughout the various stages of their employment. Sometimes, it starts at the interview stage, with a recruiter making certain assumptions or asking insensitive questions. Or it can manifest itself in the later stages, during annual reviews or promotions.

To make a positive impact, a leader needs to conduct a thorough review of how an employee experiences equity (or lack of it) throughout their tenure at the company. If there is a clear sign of bias, take corrective measures such as unconscious bias training programmes.

3. Recruit For Equity In The Workforce And Management 

According to Gartner’s HR 2020 Survey, 88 per cent of organisations have issues in promoting DEI at the C-Suite. Due to poor succession planning and inherent bias during promotions, businesses often end up with a homogeneous leadership pipeline. This could have long term negative impact on any equity initiatives.

To avoid this, leaders should focus more on creating a more diverse workforce through better recruitment policies. Employer branding can play a decisive role in attracting candidates from minority groups and communities to your organisation.

4. Take Decisive Action To Remove Any Pay Gaps

Gender pay gaps exist even in the most developed economies. For instance, the pay gap in the US has remained largely unchanged over the last two decades at around 80 per cent, according to the Pew Research Center.

As long as such blatant inequalities exist, equity and inclusion will remain distant dreams for your organisation. Improved transparency about pay scales and promotions can go a long way in improving employee morale and trust in the leadership. 

5. Use Appropriate Metrics To Track And Analyse DEI Initiatives

Tracking the DEI values in an organisation is hard, but not impossible. Pay equity, diversity in senior management levels, workplace physical accessibility, employee resource group (ERG) participation, employee demographics, candidate demographics, and employee promotion rates are all highly useful metrics.

Meticulous data tracking and analysis is essential to ensure the long-term success of your attempt to improve workplace equity in your organisation. Apart from business-wide analysis, you can also go into granular detail and focus on the impact of specific DEI pilot projects.