Leadership

Why DEI Improvements Start With Employees

By / Jun 6, 2021 (Alexey Yaremenko/iStock/Getty Images Plus)

Organizations have taken steps to make DEI more central to their CEO’s work. But knowing employees’ impressions, not just setting diversity targets, is key to an inclusive culture.

In the past year, more organizations have pledged to make improvements when it comes to diversity, equity, and inclusion (DEI). And perhaps more importantly, those organizations are doing things to make sure those pledges are more than just talk. In 2021, large corporations like Nike and McDonald’s have started connecting executive compensation to diversity goals, following changes within tech companies and more pressure from activists to address the corporate sector’s slowness to act.

The past year, Korn Ferry executive Don Lowman told Fortune, has been “causing companies to think, ‘If we’re serious about this, we ought to make sure there is a visible link between what we say and do and how we’re rewarding our executives.’”

If lack of action is costly for the CEO, it’s perhaps even worse for the organization as a whole. Last week, my colleague Rasheeda Childress spotlighted a new SHRM report that says racial and ethnic bias may have cost U.S. businesses up to $54 billion last year, due to absenteeism.

Only when diversity and inclusion are combined can organizations achieve desired outcomes.

But efforts to connect DEI efforts to a leader’s compensation only go so far, without a clear sense of what cultural issues need to be addressed. Hitting a diversity target in terms of the makeup of a staff and board isn’t the same thing as having an inclusive organization. And inclusiveness can be difficult to measure.

In a Harvard Business Review article published last month, a group of HR leaders at Gartner discussed their efforts to address that challenge. The Gartner Inclusion Index is designed to address the factors that make those diversity goals meaningful, and its main point is that a true picture doesn’t have so much to do with what the CEO does as with how employees perceive those efforts.

The index is based on a pulse survey of employees on seven factors: They’re asked how well the organization performs in terms of fair treatment; integrating differences; decision-making; psychological safety; trust; belonging; and diversity. Here, it’s important to note, diversity is just one of numerous parts that determine how the organization is doing. “While diversity and inclusion are distinct concepts—and can be powerful on their own—only when combined can organizations achieve desired outcomes,” they write. “By including diversity in the index, organizations can take action by understanding how employees perceive diversity alongside the other facets of inclusion.”

What does that action look like? The Gartner leaders say that looking for consistency is key: It’s “critical to determine whether the organization is inclusive throughout, or whether there are pockets of toxicity and exclusion hiding in the averages,” they write. It’s also crucial to be transparent with employees about your findings. After all, if you’re asking they to speak honestly about when and how they feel marginalized, they’re owed straight talk about what you’ve learned.

And, the authors note, they’re also owed quick responses: “If leaders receive results several weeks or months after the survey, then report back action plans months after that, the timeline becomes too long to be helpful,” they write. Not to mention the fact that a slow response signals a lack of concern for the issue.

The conversations around social justice in the past year have been meaningful to the extent that they’ve driven organizations to take concrete, public steps to address inequities. But public steps can sometimes be just for show, whether they’re token efforts or vague initiatives to “do better.” Even a CEO compensation plan can be little more than a PR move, even if millions of dollars are at stake. Getting the input of members and stakeholders on where the trouble spots are, tied to commitments to address them, aren’t necessarily as public-facing. But they may have a better chance to endure.

Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. More »

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