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The Level Model: Closing the gender pay gap
14. Apr. 2023 |
- min Lesezeit
Women in the EU continue to face significant disparities in pay compared to their male counterparts, with a gender pay gap of 13% still persisting. Closing this gap requires a fundamental shift in how we value skills and determine salaries.
Why unequal pay is hurting the business
Unequal pay based on negotiation skills rather than technical skills is not only frustrating for employees but also detrimental to businesses.
When negotiation skills become the main factor in determining pay, it can result in disparities that have little to do with an employee’s actual skill set. This creates an unfair playing field and can lead to a demotivated workforce. Furthermore, when employees feel undervalued and underpaid, it can lead to increased turnover rates and difficulty in attracting and retaining talent.
From ladders to growth
The Level Model is a system that defines roles and salaries within a company in five distinct levels, using a metaphor of growth rather than a ladder. The model promotes progress rather than promotion and avoids the subjective nature of the Old Boy’s Club, providing pay transparency and equal opportunities for all.
The levels can be seen as stages of construction or puzzle solving, where the right pieces create a stronger and more complex structure. This approach supports the growth and nourishment of employees, similar to how plants grow from a seed, and ensures that everyone has access to the resources and support they need to succeed.
Introducing skill-based salaries
By removing subjective factors such as gender bias in salary negotiations and ensuring that skills are rewarded equally, a level approach can provide a more equitable and transparent system for determining pay.
- 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.
"We have been committed to living and practicing transparency at all levels from day one. So it is only natural that this also applies to our salary and promotion model. From a management perspective, equal salaries across departments do bring some challenges. Yet, in our opinion, the level model is the fairest and therefore most sustainable option from all points of view."
Balancing hard and soft skills
DPM’s Level Model is based on two factors: soft skills and hard, technical skills.
Soft skills are the foundation, and DPM expects all employees to possess core components such as communication, work ethic, teamwork, and presentation skills. Additionally, DPM defines what good teamwork looks like and provides a checklist of strong feedback skills to improve the level of collaboration.
Technical skills, on the other hand, vary by department and are defined accordingly. Each employee’s level is based on their proficiency in both hard and soft skills, with pay being determined by their level. This creates an effective and collaborative workforce where everyone knows what is expected of them, and bias is eliminated.
Level up with GUSTAV
We believe in the power of feedback and constructive criticism. That’s why we have a process called GUSTAV (Growth, Understanding, and Support Through Active Feedback) that allows employees to receive feedback from their co-workers on their strengths and areas for improvement. This feedback forms the basis of an evolution plan that helps them to gain the necessary skills to move up to the next level.
The GUSTAV process is not just about improving an employee’s technical skills but also their soft skills, such as communication, teamwork, and leadership.
By focusing on continuous growth and improvement, we create a culture of excellence and collaboration that benefits everyone in the organization.
An Un-Level Model?
Leaders and employees generally have a positive reaction when the Level Model is described to them. While diversity and pay parity are often understood, the benefits of transparency are not always clear.
Remembering the flaws of the Un-Level Model, and how it still persists in some places, can help highlight the advantages of the Level Model:
Increased transparancy: Transparency in salary and promotion decisions helps create a diverse and inclusive workplace that promotes trust and high morale among employees.
Eliminated bias: Fixed salaries promote fairness by eliminating bias in hiring and promotion processes. When biases are allowed to influence decision-making, qualified candidates may be overlooked simply because they don’t fit a subjective ideal.
Higher employee satisfaction: At DPM, our colleagues are highly motivated and tend to stay because they see the short and long-term benefits to their career, and because we prioritize fairness and transparency in all of our processes.
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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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Navigating flaws
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.
Fostering growth and equity
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!
