What is the Gender and Diversity KPI Alliance (GDKA)?
GDKA is a group of DEI (diversity, equity, and inclusion) advocates, corporations, academics, and trade organizations that support the adoption and use of a set of key performance indicators (KPIs) to measure gender and diversity in their organizations. The GDKA steering committee includes Catalyst and Working Mother Media (co-chairs), along with Ascend, ELC, Equilar, Frost Included, Gender Fair, HACR, LEAP, and the WBC.
What are the key performance indicators (KPIs)?
Three high-level measurements provide an overview of the diversity in your workforce:
- Percentage of representation on an organization’s board.
- Percentage of representation by employee category.
- Pay equality: the ratio of compensation by employee category (i.e., equal pay for equal work).
These KPIs measure gender and underrepresented groups where applicable (e.g., race and ethnicity in the United States).
Why these KPIs?
These KPIs—selected after several months of evaluation to find a universal standard for measuring diversity—were derived from measurements identified by the Global Reporting Initiative (GRI). They were also included in the International Business Council’s proposed ESG (environmental, social, and governance) standards presented at the World Economic Forum. The KPIs focus on the pipeline of women and underrepresented groups moving through the organization. Women and underrepresented groups cannot progress to senior levels unless they are able to advance in the pipeline and be paid equally to others at their level.
Why should we promote the KPIs?
GDKA believes that measurement is vital for making true progress. You can’t manage what you can’t measure; currently, there is no universal standard for measuring diversity in organizations. Widespread adoption of the KPIs will help companies focus on the most important items for improving diversity and inclusion.
Who developed the KPIs?
These KPIs were derived from standards identified by the Global Reporting Initiative (GRI) that were also included in the International Business Council’s proposed ESG (environmental, social, and governance) standards presented at the World Economic Forum.
How should organizations use these KPIs?
We recommend that companies use these KPIs to measure the diversity of their pipeline. They should use employment categories that reflect the management and non-management levels within their organization and include all employee compensation. It is important to keep the evaluation consistent so progress over time can be measured.
Is GDKA advocating that companies disclose this data?
No. GDKA does not advocate disclosure of the data. GDKA requests that companies use these KPIs internally for evaluating diversity. If companies then wish to disclose their KPI results, doing so would be very helpful; however, GDKA recognizes that not everyone will be able to do so at this time.
Is GDKA planning to collect this data?
No, we have no plans to collect this data.
Does GDKA set targets for the data?
No, we are not setting targets.
How should pay equality by employment category be measured?
There are two key issues that can be unpacked with pay equality: 1) equal pay for equal work, and 2) whether women and underrepresented groups have equivalent positions to men and majority groups at different management levels.
Equal pay for equal work is the ratio of compensation expressed as a percentage and should be calculated based on the average total compensation (base, incentive, stock/options) and using an appropriate methodology for the groups measured.
The formula is for each employee category, with pay equality = (the average total compensation of the underrepresented group / the average total compensation for the majority group) * 100.
For example, if you used “upper management” as a category and were looking at gender, it would be (the average total compensation for women in upper management / the average total compensation of men in upper management) * 100.
To determine whether employees are compensated on an equal-pay-for-equal-work basis, it is helpful to evaluate ratios for similarly situated employees based on their level/category and role/job type in the organization.
Calculation of a ratio of compensation by employee category alone, such as organizational and/or management levels, may need to be further understood. This ratio results in an average that reflects the relevant gender, racial, or ethnic characteristic but lumps together people who have different jobs, skills, experience, and work locations. A low pay ratio might not indicate that people are not being paid equally for equal work, but rather that they work in roles that are not as highly compensated as other people in this category. One aggregate pay ratio should be calculated to show the true overall measure of equality in pay in an organization.
Why are no policy items included in the KPIs?
The KPIs focus on outcomes, not efforts. There is no one-size-fits-all policy. Different policy measures are warranted by different companies and situations.
Is using the KPIs all the analysis needed?
No, the KPIs are meant to give a high-level view of the corporate pipeline. They are the beginning of an analysis of diversity in an organization.
Will there be any follow-up to “prove” that the KPIs are being used?
Initially, we are relying on corporations’ assurances that they are using the KPIs. By asking them to publicly sign on to the Alliance, they are making a commitment to do this. Over time, we will explore ways to highlight those that have made sustainable progress in using the KPIs.
Are there specific requirements for supporting companies?
There are no financial or disclosure requirements. We ask only that you support the use of the KPIs as an internal measurement of diversity in your organization.
What should global organizations do to measure diversity?
Ideally, measuring gender and diversity should be done for each country where you have employees. But GDKA understands that this may not be feasible or practical. There is no consistency in measuring diversity globally. What is considered an underrepresented group varies by country. Data on underrepresented groups may be difficult to obtain, with some countries even having legal prohibitions against collecting this data.
GDKA asks that companies make their best efforts to evaluate the KPIs by gender and diversity in countries where this is feasible, and the company has a significant employee presence. Companies should define underrepresented groups in terms that are relevant to these locations.
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