‘Glass Cliff’ Phenomenon Affects Asian-American CEOs

‘Glass Cliff’ Phenomenon Affects Asian-American CEOs

An analysis published recently in the Journal of Applied Psychology finds that US companies are nearly two-and-a-half times more likely to appoint an Asian-American CEO when they are in decline than when they are succeeding. This suggests that Asian-Americans are often put in “glass cliff” situations, appointed to precarious leadership roles that others don’t want to risk taking—and stereotypes of Asian-Americans may be driving this phenomenon. Jane C. Hu discusses the study’s findings at Quartz:

In their analysis, the researchers found that Asian-American leaders tapped to lead declining companies also faced a glass cliff, experiencing shorter tenures as leaders than white leaders in the same position. Even when Asian Americans were asked to lead companies that were not in decline, they were in charge for about half as long as white CEOs (3.25 years versus six years).

The researchers also ran a few online experiments to dig deeper into people’s perceptions of Asian-American leaders. In one study, participants read a fake article, either about a struggling company or a successful one. They were then asked to rate how important they thought certain behaviors were in a leader, like working weekends or forgoing a bonus. People who read the article about a struggling company were more likely to think that “Alex Wong” would make a better CEO than “Anthony Smith”; compared to the white candidate, the Asian-American leader seemed like a better match for participants’ idea of a selfless leader. In a different study, participants rated the CEO “Alex Wong” as more likely to be self-sacrificing, and in a third study, participants chose an Asian-American executive to lead a struggling company.

Asian-Americans occupy a unique place in the conversation about diversity and inclusion in the US: Unlike black or Hispanic Americans, they are not underrepresented in professional fields, but Asians still frequently report experiencing discrimination on the job and are markedly less likely than their white peers to be promoted into leadership positions. A landmark study on racial inequality in the US tech sector last year found that white men and women were twice as likely as Asians to become executives and held almost three times as many executive jobs, with Asian-American women particularly underrepresented in these roles.

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Nike’s Pay Equity Audit Leads to Raises for Thousands of Employees

Nike’s Pay Equity Audit Leads to Raises for Thousands of Employees

Following an internal review of its pay practices, Nike is raising wages for more than 7,000 of its employees worldwide, the New York Times reported on Monday, in order to equalize compensation among employees in the same roles:

Nike cast the pay changes as part of its effort to maintain a corporate culture “in which employees feel included and empowered,” according to an internal memo sent to staff on Monday. The New York Times reviewed a copy. The company, which is based in Beaverton, Ore., said the changes would affect about 10 percent of its 74,000 employees worldwide. … Nike also announced changes in how it will calculate employee bonuses, which were based on a combination of corporate, team and individual performance. They will now be determined mainly by the company’s results.

Nike reviews pay every year, the memo noted, but conducted what it called a “deeper analysis” this year as part of its investigation into alleged problems that were driving many women to quit. Addressing the discrepancies found in this audit will be expensive for Nike, but one thing most companies don’t realize about pay equity is that this cost of closing pay gaps increases each year, so it will never be cheaper for Nike (or any company) to correct this problem than it is today. Pay gaps don’t have a “one-and-done” solution, however, so it’s important for organizations to continue scrutinizing pay practices from year to year to spot the re-emergence of these gaps and take proactive steps to ensure that their pay practices remain equitable. (CEB Total Rewards Leadership Council members can read our entire landmark 2017 study on pay equity here.)

The change Nike is making to its bonus calculations is also notable, as it reflects the growing understanding of how variable compensation such as bonuses contributes to pay gaps. This “bonus gap” occurs when more men than women (or more white than non-white employees) are promoted to the high-level positions that make them eligible for bonuses, or when unconscious bias affects the performance judgments managers make in awarding them. The significance of the bonus gap was illustrated in the gender pay gap reports UK employers were required to publish earlier this year: Financial firms in particular found that their bonus gaps, in some cases amounting to over 60 percent, were bigger factors in their overall gender pay gaps than differences in base pay.

Best Buy, CVS Drop Personality Tests in Recruiting to Address EEOC Concerns

Best Buy, CVS Drop Personality Tests in Recruiting to Address EEOC Concerns

In separate agreements with the US Equal Employment Opportunity Commission, Best Buy and CVS have decided to stop using personality tests as part of their recruiting process, Erin Mulvaney reported at the National Law Journal last week. While the details of the agreements are confidential and neither company admitted liability, the EEOC said a former commissioner had raised concerns about the companies’ policies, prompting the agency to scrutinize whether these practices were potentially discriminatory:

The tests came under increasing scrutiny for their potential to weed out people with mental illness or certain racial groups. CVS had previously agreed, for example, to remove certain mental health-related questions from its questionnaire after a probe from the Rhode Island Commission for Human Rights.

In recent years, the EEOC launched investigations into personality tests on the grounds of discrimination and has guidelines for these job applicant assessments. Some companies on their own have decided to eliminate or reduce parts of the assessment tests, including Whole Foods Market Inc.

Target reached a $2.8 million settlement with the EEOC in 2015 over its candidate assessment system, which was alleged to discriminate on the basis of race and sex, and ended the practice. The agency has also litigated and won cases regarding such assessments against other companies over the years.

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UK Employers Encouraged to Publish Parental Leave Policies Online

UK Employers Encouraged to Publish Parental Leave Policies Online

A member of Parliament in the UK is pushing for employers to be more proactive in clarifying their parental leave policies to their current and prospective employees, introducing a bill that would require many organizations to publish their policies online, the BBC reported on Wednesday:

Jo Swinson, a Lib Dem MP, said this was “a simple and practically effortless change” that would improve transparency and encourage more competition on pay. It would help firms “better attract and retain talent”, she added. Human resources trade body the CIPD said publication could help tackle discrimination.

Ms Swinson said more than 54,000 women a year lose their jobs because of pregnancy and maternity discrimination, while fathers were worried about taking shared parental leave because of the negative effect on their careers. … The MP has tabled a bill in the Commons that would require firms with more than 250 employees to publish those policies. Prospective employees would have a clearer idea of parental leave policies without having to ask at interview, she said.

In arguing for her bill, Swinson noted that “the very act of asking” about parental leave “suggests to the employer that the candidate may be considering having a child.” A recent survey of UK employers found that most expected women candidates to disclose if they were pregnant or planning to become pregnant, and many managers would decline to hire a woman of childbearing age on that basis. Publishing these policies would enable candidates and employees to find out about them without having to reveal their intent to have children to a manager who might penalize them for it.

There is really no good reason for employers not to advertise their parental leave policies, as these and other family benefits are highly attractive to many candidates—particularly, but by no means exclusively, women. Our research at CEB, now Gartner, has found that the availability of parental leave has a significant positive impact on employees’ perceptions of their overall benefits package. A lack of family-friendly policies is often a key factor in driving women out of the workforce. (CEB Total Rewards Leadership Council members can view our data on parental leave and rewards perceptions here.)

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Employment Issues Remain Uncertain as Maine Marijuana Law Moves Forward

Employment Issues Remain Uncertain as Maine Marijuana Law Moves Forward

Maine was one of several US states where voters passed measures to legalize the use of marijuana for recreational purposes in 2016. Republican Governor Paul LePage has sought to stymie legalization by blocking implementing legislation. Last November, LePage successfully vetoed the first version of this legislation, and late last month attempted to veto a second version, but both houses of the state congress voted on May 2 to override his veto, UPI reported. The rules in the final bill are somewhat less permissive than those initially approved by voters with regards to the regulatory mechanisms under which legal marijuana can be grown and distributed in the state.

Other aspects of the voter-approved ballot measure, such as its provision protecting marijuana users against employment discrimination, have already gone into effect. That provision, which went into effect February 1, prohibits employers from refusing to employ or otherwise penalizing anyone over the age of 21 on the basis of their using marijuana, provided they are not using it during working hours or on the employer’s property. That has significant consequences for Maine employers’ drug policies, as a positive test for marijuana would no longer be sufficient cause for terminating an employee (current testing methods can only detect whether an individual has consumed cannabis within the past few weeks, not whether they are currently under the influence).

The implementing legislation, however, contains different language regarding how employers can and cannot treat employees who use marijuana, Seyfarth Shaw attorneys observe at their dedicated marijuana-law blog, The Blunt Truth:

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US Employers Might Still Think Twice Before Forcing Arbitration

US Employers Might Still Think Twice Before Forcing Arbitration

The US Supreme Court ruling on Monday upholding employers’ right to include arbitration agreements and class action waivers in employees’ work contracts is being celebrated by business associations and employer-side attorneys as a major victory, mitigating the risk of expensive litigation over labor disputes that may arise from honest mistakes rather than deliberate malfeasance. Advocates of arbitration say it is faster and cheaper than a courtroom trial and that the confidentiality of arbitration is a benefit to both employees and employers (though critics, of course, disagree on all of these points).

What individual arbitration does not protect organizations from, however, is reputational risk. We’ve seen this in the public blowback against companies whose arbitration policies are interpreted as them trying to hide ongoing discriminatory behavior. Within the past six months, companies like Microsoft, Uber, and Lyft have abandoned forced arbitration of harassment cases to guard against this risk. The public relations downside to handling these matters quietly may be growing to outweigh the upside in terms of cost and legal risk.

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Supreme Court Declines Case on Banning Dreadlocks in the Workplace

Supreme Court Declines Case on Banning Dreadlocks in the Workplace

In 2016, a US appeals court ruled against the Equal Employment Opportunity Commission in a suit the agency had brought on behalf of Chastity Jones, a black woman who had been denied employment at the Mobile, Alabama insurance claims processing company Catastrophe Management Solutions after she refused to cut her dreadlocks in compliance with the company’s grooming policy. Absent an explicit racial dimension to the policy, the court ruled, CMS was within its rights to ban dreadlocks in general as part of its dress code.

The EEOC chose not to pursue the case further, but the NAACP Legal Defense and Educational Fund sought to appeal the ruling in the Supreme Court. Last week, however, the high court said it would not take the case. The court’s refusal to hear this case is a blow to advocates who see workplace hairstyle policies like these as discriminatory in effect if not intent, as they place greater constraints on the choices black people, and particularly black women, than other employees and often penalize black employees for wearing natural hairstyles. Implicit bias against black women’s naturally textured hair is a well-documented phenomenon in American society, which causes many black women to experience pressure to artificially straighten their hair or wear hairpieces.

CMS’s dress code did not explicitly mention dreadlocks, but rather mandated grooming that reflected a “professional image” and barred “excessive hairstyles.” This suggests to Rewire’s senior legal analyst Imani Gandy that such policies as applied are not as race-neutral as they appear on paper:

First, CMS’s purported race-neutral grooming policy is anything but—since it excludes Black women’s natural hairstyles based on stereotypes that natural hairstyles are unprofessional, messy, not neat, political, radical, too eye-catching, or excessive.

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