Big Data Uncovers Gender Inequality in Pay

“Big data” is commonly piped up as a large scale of information gathering that can help sizable organizations arrive at conclusions. Parsing it is an outlook to the future and a status update. While it commonly points to business-like information, it also surprisingly holds value for diversity and inclusion.

Xactly Corp., a firm that provides cross-industry incentive compensation plans for sales commissions and employees, first took a look at its own gender inequalities that surfaced from data analysis. Chris Cabrera, the company’s CEO, quickly took action to straighten out the stark contrast in pay and performance between men and women at his company. Furthermore, Xactly Insights compiled nine years worth of sales compensation data to highlight the wider issue: the gender favoritism in employee pay that often forgoes actual performance.

Cabrera shares his company’s story, gives insight on how to handle big data and highlights the gender inequality in business. Below are edited excerpts from his interview with Diversity Executive.

What was the process of discovering the pay and gender inequality at Xactly, and what actions did you take post?

Xactly offers a cloud platform that manages the incentive compensation initiatives for more than 700 customers. As part of our big data offering, Xactly Insights, we anonymously analyze the data running though our platform to look for anomalies and interesting data points that can help our customers better design and manage their compensation programs.

When we looked at the pay versus performance of men and women sales representatives, we made some staggering discoveries. Not only were men being paid more, on average, women were actually performing higher — making their sales quota three percent more often than their male counterparts. Seeing this data made me wonder if this could be happening right here at Xactly, and I was shocked to see it was. There were a small number of employees, both female and male sales representatives, who were being paid incorrectly based on their performance. Within days of receiving this information, I had worked with our HR and accounting teams to get this corrected.

Can you explain working with big data a little more? How can companies leverage it and to what means?

Valuable data has always existed within organizations, but historically has been siloed and locked away from deeper analysis in sources like spreadsheets. But, we are at a crossroad where data is growing and multiplying faster than ever before. Information is coming from more and more applications in the enterprise: social media, videos, mobile devices and a bevy of other sources. In tandem, new technology has emerged that lowers the barriers for companies to manage, analyze and understand that data and leverage it to rethink how they do business and serve their customers. With these new innovations, Xactly now has the ability to analyze nearly a decade worth (multiple terabytes) of compensation information across billions of transactions to find insights and best practices that help our customers design, implement and execute more impactful compensation initiatives. These insights have led to big dollar savings and new efficiencies for our customers. In fact, pinpointing an issue in one customer’s compensation model led to a savings of seven figures annually.

What are the differences the study revealed about female and male-led teams?

Interestingly, the study showed that women are more equitable not only in how they build teams, but are also more effective leaders. Women led teams were often more evenly split between men and women sales representatives, while male led teams had a 75/25 percent male to female ratio. Women also tended to stay in their position nearly one year longer than men.

Another study from Zenger Folkman found that women in sales leadership positions also tend to be four percent more effective than their male counterparts.

How can CEOs at other companies begin a similar process in discovering these discrepancies?

I have always worked to create a fair, equitable workplace that embraces the skills and talents of everyone, of every gender, age and ethnicity. In fact, Xactly has twice been named as a Great Place to Work in Fortune Magazine. While pay inequality between men and women is widespread, I believe in my heart that in many cases these inequalities are not malicious, but rather a lack of information. Big data holds the answers, but as leaders, we need to be willing to ask the hard questions. 

At a time when a lack of engagement is costing U.S. businesses billions and talent is often scarce, companies can no longer afford to alienate some of the strongest performers in their workforce by paying them inequitably. Merit alone — not manhood — should dictate how an employee is paid.  

Other than equalizing pay, what other factors in gender favoritism should companies keep in mind?

Gender inequality can happen at any level and function in a business. This goes from how a company reviews candidates, to promotions, how feedback is given and how they stack their executive team. In any of these scenarios, gender should never be a guiding factor.

Leaders need to set a strict tone and policy that gender discrimination won’t be tolerated. For me, this topic became more personal than just what was happening within Xactly. It was also the realization that this is the environment that my daughter — who will soon be entering the workforce — will be working in. I felt compelled to take a stand and hope sharing my story inspires others to do the same.