COMP NEWS- As social changes around the world reach the workforce setting there are many companies who are actively investing in diversity, equity, and inclusion aka DEI measures. Most companies have opted to take external approaches to DEI by promising to invest in minority-owned businesses in their community and by increasing their hiring margins for minorities. But in regards to compensation and internal equity, the answer remains unclear as more companies seek out solutions.
There are many different ways a company can examine the way they use their compensation to enhance DEI at their company. Some companies like Ovia are using DEI as a target KPI for each department of their business, adding a compensation bonus to their workforce if certain targets are met.
Ovia reviews divisional and company DEI performance on a regular basis, and uses the targets to determine 10% of bonuses for everyone in the organization.
Other companies such as McDonald’s are pushing DEI in the form of executive bonuses that purposefully drive these initiatives and buy-in from top-level management.
In February, McDonald’s announced that the compensation of its ten Executive Vice Presidents will be tied to human capital management metrics starting this year (2021).
This could be a great way to push such initiatives forward within a company, but it remains to be seen if these initiatives will actually lead to retention and proven development of minority workforces or if they will be used as a short-term data point for organizations to reach their bonuses.
Companies that are following in Ovia’s and McDonald’s footsteps demonstrate a positive new trend in the compensation world related to future DEI initiatives and hopefully a more diverse and fairly paid workforce for all.
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