Defining Equity: What Organizations Need to Know Now

Categories: Diversity & Inclusion

This is the second in a series of insights adapted from the upcoming book “Inclusive Leadership, Global Impact,” co-authored by Dr. Ernest Gundling and Dr. Cheryl Williams. To order the book, please visit Amazon.

In the wake of the Black Lives Matter movement and related cross-border efforts, there is a more intense focus on the obligations of major organizations to serve causes such as equity and social justice regardless of the direct business benefits. Intensive social discourse has sparked calls for systemic change, and many companies, as well as other institutions, are now responding because making a significant commitment to equity is seen as the right thing to do. Moreover, equity is increasingly cited as the key to future prospects for “inclusive growth” that would create vast new potential for economic expansion.

Yet there are many different definitions of equity, both implicit and explicit, and people holding different definitions often find themselves at odds with each other. Such confusion can lead to initiatives that lack widespread buy-in and encounter unexpected backlash. Cross-border initiatives may encounter employees who know the dictionary definition of equity as “fairness,” but are unsure of its implications in a corporate context. Here is a spectrum of contrasting definitions that range from providing equal opportunities to achieving equal outcomes:

Hiring: Some organizations focus on equal opportunity employment, seeking out candidates from underrepresented sections of society to bring their talents into the workforce. A point of view expressed by many executives is that “If we hire for diversity, we are inclusive.” Equitable hiring practices can be one important step for fostering greater inclusivity, although they must usually be augmented by other measures such as exploring new recruiting channels or rewording job postings.

Access: Another approach to equity is to focus on what happens after new employees are hired—whether they have fair access to developmental opportunities. Are some individuals getting more developmental feedback from their managers than others? Does everyone have meaningful opportunities to succeed, or is there an uneven approach to making opportunities and resources available to rising talent? Is the performance management system calibrated to recognize a broad range of skills and abilities? Does the promotion pipeline tend to weed out people who are different from corporate norms?

Support: At various junctures in their career paths, employees from backgrounds not present in the current leadership group may need additional forms of support to make progress. Whether their minority status is based, for example, on race, ethnicity, nationality, gender, or a combination of such factors, an organization is more likely to retain minority talent and best leverage individual capabilities by offering timely coaching, mentoring, or sponsorship. Particularly when there are few role models with similar backgrounds in the executive suite, it can be helpful for minority employees to learn from leaders who have “been there and done that.” Visibility and relationships within informal social networks are also important, and mentors or sponsors can often open doors for their protégés to receive recognition and fresh opportunities.

Targets: Many organizations are now setting specific targets that could include hiring, retention, engagement, and promotion of underrepresented employees. For instance, if an organization is aiming to develop a leadership pipeline that is comprised equally of men and women, but their workforce is comprised primarily of men, they will need to implement measures focused on attracting, retaining, and developing women. A common challenge is to set goals that are both ambitious and realistic based on the available talent pipeline and the performance of industry peers.

Compliance: There are various approaches worldwide to implementing regulatory and/or corporate mandates. A number of countries (e.g., South Africa, Malaysia, Nigeria, India, Canada), as well as companies, have established affirmative action requirements in areas such as education, hiring, promotion, equity ownership, procurement, government jobs, or board composition. Such requirements are typically in place to include people who have been historically marginalized, with the intention of creating a workplace that is more reflective of the general population. These measures can be seen as controversial and have been criticized by some as undermining merit-based standards. Detractors cite negative consequences for employers as well as for employees who are either promoted or left behind by overly rigid requirements. Several related questions are part of ongoing compliance discussions in many organizations:

  • Do we establish a pool of candidates who are “qualified” and then select from this pool, or look for the “best” candidate, especially if this latter criterion is influenced by fit with the current culture and the status quo?
  • Is our approach to equity simply meeting a requirement—“As soon as we hire them, we’ve succeeded”—or is it to continue looking for areas of growth where there is an opening for a person with the right experience and ties to a new market?
  • What is our message to other employees who are not addressed by a given requirement? They might think, “I no longer have a chance here regardless of my performance because others will be favored.” Or they could say, “We’re committed to building an inclusive organization, and my day may come tomorrow if I continue to perform well.” How can we convey the intent of new policies in a way that is accurate and does not produce unintended consequences?

Implications: Priorities, Clarity, Alignment

Leaders now under pressure to make a commitment to greater equity must consider what to prioritize and where to invest limited resources—”What is our ‘why’ for equity, what are we trying to achieve, and how are we going to get there?” Depending on a company’s unique characteristics, they may choose to focus on one or more of the forms of equity listed above. Achieving clarity and alignment about the type of equity that fits one’s own organization provides the best starting point for practical action.



About the Author

Ernest Gundling, Ph.D
Co-Founder and Managing Partner

Dr. Gundling has worked with numerous Fortune 500 firms and is a sought-after keynote speaker and executive coach. He has lived in Asia and Europe, including six years in Japan. Dr. Gundling holds a Ph.D. and M.A. from the University of Chicago, and a B.A. from Stanford University; he also serves as a Lecturer in the Haas School of Business at the University of California, Berkeley. He is the author of six books, the latest titled, Inclusive Leadership, Global Impact.

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