Gender Pay Equity Study

Starbucks is now a large, multinational company that started out as a small, local coffee shop in 1971 in the city of Seattle. From its initial promise as a seller of exceptionally good coffee, Starbucks is still known for the craft of preparing the perfect cup of coffee. Since their opening of a single location in Seattle near Pike Place Market, the company has grown to include franchise locations all over North America, Japan, Europe, and China. Starbucks is also a known leader in the work force including for their ability to address the pay equity gap. In 2018, Starbucks announced it had achieved 100% pay equity within the United States for all men, women, and races that performed similar work (Covington, 2019).

In a published statement, Starbucks maintains it has three pay equity principals: (a) equal footing – paying each partner based on their skills, abilities, and performance; (b) transparency - publishing pay equity progress on an annual basis, and utilizing an offer standards calculator to determine starting pay ranges for roles; and (c) accountability- setting goals to achieve pay equity, conducting comprehensive compensation analysis, analyzing compensation decisions before they are final (Dahlstrom, 2019). Starbucks wants not only to achieve pay equity globally, but wants to maintain it. In addition, the company strives to help other multinational companies achieve pay equity (Covington, 2019). These practices are being implemented in Canada as well, and they are shared publicly to assist other companies in achieving equal pay.

The Pay Equity Act was passed in December, 2018. It applies to all federally regulated private and public sector businesses with more than 10 employees. The purpose of the Pay Equity Act is to address ongoing issues around the gender pay gap (National HR, 2021). Interestingly, in the case of Starbucks, you see 100% pay equity within the company not only based on gender but also based on race. In addition, the company has made extensive efforts to hire a diverse work force: refuges; veterans; opportunity youth; military spouse; different ethnicities (Covington, 2019).

With pay equity, I believe the “gender gap” is only the tip of the ice berg. However, the main focus of the Pay Equity Act is to close the gender pay gap, rather than achieve pay equity across the social spectrum. In Canada, only 4% of CEOs are women (Macdonald, 2019). There is no doubt that women “need a seat at the table” (Sandberg, 2021). Among other things, women need to be able to negotiate for themselves, and among themselves. When more women see themselves reflected in the corner office, they may start to accept their accomplishments just as their male counterparts do now, and not to credit someone else for their ideas or successes. It is the case that at present at least, women are disadvantaged when it comes to on the job experience because of the societal norm of women staying home to watch after their family (Sandberg, 2021). But it does not need to stay that way. The Pay Equity Act can go some way to address these workplace inequalities among men and woman, but as I have said, it is just the tip of the ice berg of employment inequity.

Starbucks’ approach to pay equity is to apply that principle to all employees regardless of gender or race. The sole purpose is to provide equal pay for equal work. This is where I believe HR’s role comes in, with the creation of detailed job descriptions to perform proper job evaluation. One of the issues with closing the gender pay gap is that some organizations are not willing to put together or develop proper job descriptions (Singh, 2018). Without proper job descriptions outlining the specific tasks, knowledge, and skills it would be difficult for an organization to compensate each worker equally. As seen in the example with Starbucks, this would be the equal footing portion. Once proper job descriptions are established, it would then be the role of HR to evaluate the job to determine and characterize work that the organization values and that helps achieve their objectives (Singh, 2018). This is one aspect of transparency present in Starbucks’ strategy.

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