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The Level Model: How to Reduce the Gender Pay Gap
14. Apr 2023 |
- min Lesezeit
Women in the EU earn 13% less than men for doing the same job. Not at DPM. We’ve been working on this for a while. We don’t climb here, we grow…
Unequal pay is frustrating, demoralizing and bad for business. And it’s not just about the gender pay gap. Ever been confused about a hiring decision? It could be down to a lack of transparency. The process should be open and objective, but this isn’t always the case.
For example, why is it so rare for pay scales to be included in a job description?
Sometimes, there can also be a sense of mystery around promotion decisions. It’s quite common to hear about people with a comparatively weak technical profile being paid more than someone more qualified.
Often it’s a question of strong networks or negotiation skills, not merit.These are the people who can talk the talk. But can they walk the walk? Not always, and not here.
So what is the Level Model exactly? At its core, it’s about opportunity; a level playing field. It allows leaders to attract, train and then retain great people. There’s no mystery and no gossip; “How did X get that promotion when they’ve been here half the time of Y”.
If your employees are ambitious, they need to know how you intend to help them achieve their goals.
A clear path to progress
The Level Model is explicit.
Each role within the company is clearly defined and broken down into five levels, and each level has a salary. You can imagine it like a ladder, but that implies climbing upwards. To me, this means moving away from something, or leaving people behind.
On a ladder there’s only space for one person. At DPM we don’t use ladders!
I much prefer the metaphors of growth or building. Growth is a term that’s used so often it’s almost lost its meaning. Plants grow from a seed, they are nourished, they have challenges, and they strive for the light.
Trees cannot reach the sun without roots and resources. People are similar. We can also see the different levels like stages of construction, or puzzle solving. You add the right pieces and the structure becomes more concrete, more complex.
- The Level Model is a transparent framework for managing pay parity and promotion.
- Everyone knows exactly where they stand in relation to colleagues. There are no secrets because each ‘level’ has a predefined salary.
- Team members are individually supported to make progress. Each person is paid fairly for what they bring to the table.
The Level Model promotes diversity and inclusion, which helps to create teams with high morale. By having a transparent system for hiring and promotion based on skills and experience, rather than subjectivity or bias, the Level Model attracts and retains top talent.
How we do it at DPM
At DPM we use the Level Model to ensure that pay is based purely on ability. Each level has a set of skills and everyone on the same skill level earns the same salary, regardless of the department they work in.
This means that you know exactly what your colleagues are earning, and vice versa. There are no secrets and no favouritism. Since pay is based on skills, gender bias is eliminated. .
Soft skills are the foundation, and each department defines their own level model based on concrete technical skills. These skills are divided into five levels, Level 1 being Junior, and Level 5 being Executive/ C-Level.
Everybody can see what it takes to get to the next level.
Of course, reaching the higher levels is a challenge, but if you’re dedicated, you can jump from trainee to Junior in just a few months. Going from Level 3 to Level 4 requires effort and expertise.
But, it doesn’t run itself…
No system is perfect. To function as intended, the Level Model requires that each role has a clearly defined framework for professional development. This takes a huge amount of work to set up and maintain.
It’s a living document that evolves over time, along with the colleague.
This approach also means that negotiation becomes a thing of the past. Because salaries levels are clearly defined for each level, there’s no room for unfair advantage.
Time to level-up
The Level Model is based on continuous growth, evolution, and adaptation. This includes employees, DPM as a company, and the framework itself. We feel it’s the fairest way, and most equal way to manage both personal, and technical growth for our team.
And they agree!
An Un-Level Model?
When I describe the Level Model to other business leaders, reactions are generally positive. Most people get that diversity and pay parity are a good idea (thankfully!), but it’s not always clear to them that this kind of transparency is the best way to go.
I always find it useful to remember why we do it, to think about how things used to be (and still are in some places); what the Un-Level Model looks like:
Bias (not best)
An opaque hiring and promotion strategy creates an environment where biases can take hold and become a kind of institution. We’re all biased, consciously or unconsciously and the best way to beat bias is to be aware of it.
When bias is left to work behind closed doors, it can lead to the most qualified or deserving candidates losing out because they don’t fit some subjectively defined ‘ideal’.
Diversity & inclusion
Without transparency, it’s difficult for you to ensure that you’re hiring and promoting individuals from diverse backgrounds, including underrepresented minorities, women, and individuals with disabilities.
Transparency enables you to create a diverse and inclusive workplace, and that’s the foundation for a diverse and inclusive business.
Trust & morale
An opaque hiring and promotion strategy creates an atmosphere where employees feel they’re not being fairly evaluated. This erodes trust and morale which leads to increased turnover and difficulty in retaining top talent.
At DPM, we find that colleagues are highly motivated. People want to work here because we’re not like other places, and when people come, they tend to stay. I think this is because they see the short and long-term benefits to the career. It’s also a fun place to work!
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Transparency is not just about idealism. It makes serious business sense. The data shows a strong correlation between a diverse workplace and increased productivity. Diverse workplaces are built on trust and safety. When employees feel safe, they begin to feel valued and motivated. Retention rises, and turnover falls.
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Challenges of implementing the Level Model
The Level Model is not flawless and requires a clearly defined professional development framework for each role to function effectively. This process demands a significant amount of effort to create and maintain a constantly evolving document. The advantage of this approach is that it eliminates negotiation, and salary levels are explicitly defined for each level, eliminating any potential for bias.
Continuous Growth and Evolution
The Level Model is designed to foster continuous growth, evolution, and adaptation, not only for the employees but also for DPM as a company and the framework itself. We believe that this is the most impartial and equitable method to manage both personal and technical growth for our team, and our colleagues agree!