Wondering how equitable your organization is? Here’s a diagnostic that can reveal opportunities.
Diverse, inclusive organizations aren’t just better for employees — they have stronger business performance and higher stock market returns.
Leaders looking for a competitive edge must ask: “Is my organization equitable?”
Great Place To Work® research has found that diversity, equity, inclusion & belonging (DEIB) is best measured using the framework of the “Four Equities.”
“A lot of organizations want to build a truly equitable and empathetic workplace, but don't know how to start,” explains Marcus Erb, vice president, data science and innovation at Great Place To Work. “This is really complex work, but if we focus on these four things, suddenly it clicks.”
The four equities were developed as part of The Great Transformation, a three-year research initiative with 11 companies to crack the code of DEIB.
What are the Four Equities?
Each equity represents a vector of the employee experience that affects efforts to improve equity and inclusion throughout organizations.
1. Equity of representation
According to Great Place To Work research, there isn’t a prescriptive number that a company must reach to have the adequate representation of minority voices across the organization.
Instead, companies should ask themselves: “Does your workforce reflect the communities and clients you work in and serve?”
That representation should be reflected across all demographics, roles, and leadership levels.
“What does your leadership look like? Your boards, your CEO, your executives — do they reflect those communities as well?” Erb says.
2. Equity of compensation
Pay equity doesn’t mean equality, but organizations must do a careful audit to understand where they might be overlooking qualifications and skills in some of their workers. For example, does your organization pay a recent college graduate more than someone who has five years of experience working for your company?
Overemphasizing college degrees and traditional career paths can lead to disparity in your workforce.
Companies should also consider external factors that impact employees’ financial well-being. “How can we consider the full economic background of people — not just the work?” Erb says. “Are we rewarding employees in a way that allows each person to experience financial security and be able to pursue their life goal?”
For example, companies might want to offer additional support to neurodiverse employees who might be living on their own for the first time and need additional support navigating financial decisions. Other companies might consider additional ways to support people managing student loans or the costs of caring for a family member.
3. Equity of opportunity
Does every employee in your company have the opportunity to grow and develop? Who is the most likely to be promoted?
Who gets the plum assignments that lead to one-on-one time with top leaders, development of new skills, and opportunities to change job roles?
It’s important to collect hard data, not just about who gets promoted, but also who gets access to training and development, Erb says. Analyze any gaps across different identities, including gender, ethnicity, age, caregiving responsibilities, and more.
Hard data should then be matched to how employees say they feel. Do they feel promotions are handled fairly? Is everyone confident that the company and their manager are invested in their professional growth and development?
“Once you get that picture, you’ll identify the areas where you can improve,” Erb says.
4. Equity of well-being
Well-being has become an essential consideration for DEI&B, particularly as belonging plays a crucial role in employee well-being. Do all employees in your company consistently experience inclusion, belonging, social support, and a sense of purpose?
“You need to feel that you belong there, that you’re accepted for yourself,” Erb says. “If not, you’re going to experience assimilation, burnout, all these other terrible things.”
One particular area where employees often have inconsistent experiences compared to their colleagues is around purpose and meaning at work.
“We saw in our research that folks don’t experience an equal sense that their work matters,” Erb says. Equity of well-being requires employers to consider the whole employee, the lives that shaped their journey to the organization and the burdens they may face outside the company’s walls.
“The goal is for employees to show up and bring the best version of themselves to their work,” Erb says.
Starting with opportunity
All the equities are interrelated, but a focus on equity of opportunity has been found to quickly impact the other three equities.
“They’re all important,” Erb says, “but I would say the most critical is equity of opportunity.”
Employees who have equal opportunity to grow and develop are more likely to have higher levels of well-being and are more likely to be promoted into roles with higher salaries.
“If you focus on equity of opportunity, you’re going to promote leaders who can help you create a more diverse workplace, and address equity of compensation,” Erb says.
What are some ways organizations can improve the equity of opportunity for all workers? A simple, but often overlooked example is requiring all people leaders to have a one-on-one meeting with their direct reports.
“If you’re not having one-on-one conversations with your folks about what’s important to them, their performance, what they want to grow into, they can’t grow,” Erb says “And fundamentally, they’ll never experience a fair sense of growth.”
When managers don’t build relationships, employees are left to rely on luck, politics, manipulation, and other unsavory behaviors to get ahead. One-on-one meetings can also alleviate other issues within the organization, such as a broken promotion pipeline.
When managers have development conversations and build relationships with their direct reports, promotions become more merit- and performance-driven.
“You can connect with the human that you’re working with because you start to care,” Erb says. “And as soon as you have that care, as soon as you have that empathy, the growth just happens.”
The power of data
The four equities provide the framework, but employee data is what informs leaders about the performance of their organization.
“You can be doing great things and employees are telling you, ‘No, it’s not actually working,’” Erb says. “There’s a truth in people’s experiences that you don’t get externally.”
It’s not always bad news, either. Sometimes employees will tell you about something that is making a positive impact that you can formalize and scale to the rest of the organization.
It all starts with an assessment, Erb says.
“Get some data. Look at your company and figure out where you really are — and then think about where you want to be and articulate those goals.”
The right kind of goals for your organization will be both realistic and a bit of a stretch.
The good news is that progress on the four equities are tied to stronger employee recruitment and retention, and improved overall business performance. When employees experience the four equities, they are more likely to advocate for their company, to become brand ambassadors, and stay with their employer long-term, Erb says.
“They demonstrate more agility and effort — all the metrics we look at just start to jump off the page.”
Benchmark your workplace
Get the data you need to measure the four equities at your workplace via Great Place To Work Certification™.