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Every Day Should Be Equal Pay Day

- April 10, 2018 - 25 Comments

I’m wearing red today. Not because it’s my favorite color, but because I proudly support fair pay. In the United States, today is Equal Pay Day—a day to remember how far some women and minorities are “in the red” with their pay.

As Shari Slate, VP, Chief Inclusion and Collaboration Officer, wrote a year ago, the issue is simply about fairness. At Cisco, we’re committed to Our People Deal, connecting everything, innovating everywhere, and benefiting everyone. We know that our edge comes from our people. So, we focus on ensuring that everyone who works for Cisco is paid fairly for the job that they do, regardless of gender.

Cisco has led the way to pay parity by signing the White House Equal Pay Pledge and sharing best practices with the Employers for Pay Equity Consortium. Across the globe, we regularly test for pay parity based on gender – both men and women – and inclusive of ethnicity in the United States. If we find gaps, we fix them. This commitment to pay parity isn’t a one-time event. It’s part of our ongoing process to make sure that people are paid equitably for similar work in the same location.

To further pay parity for new hires, we no longer ask U.S. job candidates how much they made at their last job. The ban on salary history questions is a new legal requirement in some states, but Cisco opted to make it broader. We’re basing our salaries on market data, candidate experience and expectations, and the level and location of the role.

We’ve also started offering deeper insight into market pay rates to our leaders as part of rewards planning. This information helps managers to make better decisions around compensation and leads to more transparent conversations with employees about how their pay compares to similar jobs in the same location. Better insights result in better rewards decisions, more fair pay overall, and a more satisfied workforce.

Equal Pay Day may be commemorated on just one day. At Cisco, fair pay is created every day. I’m so proud of the progress we’ve made, and I’m excited for more bold moves toward greater inclusion and transparency. Join the conversation at #EqualPayDay.

#MomentsthatMatter #OurPeopleDeal #InclusionIsHappening

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25 Comments

  1. Thank you so much for this parity effort, it's a fantastic improvement. Cisco is an amazing compagny to work for and should be indeed a model in the industry. Too many times unfortunately there are situations with a parity gap and women are sharing they are penalized when going on matertinity leave... missing the promotion round or else .. The guidance around lateral move "game" was played in both ways. Sometimes abused and also sometimes used as a good "excuse" avoiding parity alignment. Congratulations for this effort to be more pragmatic and rational looking at same level of experience, responsabilities the role implies and support equity. Is Cisco considering to support this alignment with a separate budget than opex distributed to the managers ? What leverage will you use to make it happen ?

    Thank you for the details. I am cautiously optimistic to see the results.

  2. I’m very proud of Cisco for doing the right thing to address fair pay. I truly appreciate this article about what Cisco is doing including plans to equip leaders & managers to have better insights on market pay rates. I hope more details are forthcoming but in the meantime, can you clarify the statement “If we find gaps, we fix them.” How will Cisco fix pay parity? What are the tangible steps of identifying an impacted employee, making the change, and communicating it to the employee? Who decides if an employee is paid unfairly or fairly? Does the conversation start with the employee, or the manager, or HR, or someone else? Will the impacted employee be informed of the change in pay is due to pay parity? How many decision-makers are involved to make a change possible? When will the pay change take place? Will Cisco publish statistics about pay disparity? Last but not least, how does a female employee & a minority bring up this subject with a manager without fearing of causing some friction with the manager, especially when this fear may be the reason why many females are hesitant to talk about pay? I thank you for your time.

    • Let me try to give some context the process. The Compensation team works with an outside consultant to conduct the analysis, using the methodology developed by Cisco. This methodology primarily considers the role, the grade, the location, performance, experience. The results are then provided to the Compensation team to then communicate directly to the HR partner and the manager that we will be making a pay parity adjustment for those employees where an adjustment is needed. The adjustment will be made if, and only if, the manager is addressing a performance issue that should be considered. Assuming no performance issue, the employee will then be told that he/she is receiving a pay adjustment as a result of the pay parity findings. In February, we completed the global analysis and communications to employees receiving a pay adjustment. Whether a man or woman, regardless of ethnicity, it is ok to raise the question about pay with your manager. These conversations often can give insight into a manager's pay decisions, one's performance to expectations and opportunities. If, as a result of the conversation, you are concerned that there is or will be retribution, please do reach out to Employee Services.

  3. "we regularly test for pay parity based on gender – both men and women – and inclusive of ethnicity in the United States" Interesting that we don't test for ethnicity parity outside the United States. Perhaps Cisco should try to go beyond what is legally required. Also, I understand there may still be some age discrimination. In my experience, age is a plus, given equal performance. But I guess this is difficult to change. What are those pay parity tests? How are they different than just a gender-blind test for performance? Do we just want to make sure that within a given grade, women and men get the same average pay (i.e. are we assuming the average performance must be the same)? Do we want to make sure that women and men are within the same percentage across grades? Thanks for the discussions. It's a complicated and politically loaded subject, but the most transparency, the better.

    • You have a lot of passion on this topic and I value that! As much as we'd like to test for parity across ethnicities, we can't since ethnicity data is either not captured at all or not captured consistently in our systems outside the U.S. It's a great goal to have but one that will require some great forethought. As far as going beyond what is legally required, we do! In some countries such as the United Kingdom there is a legal requirement to report on pay, but in most countries this is not the case. Even where there is a requirement our analysis is much more robust than that which is required by the government. Our methodology for determining pay is not as basic as comparing average pay nor is it trying to drive everyone to the exact same pay. We have to consider experience, performance, location, etc. as these factors do and should affect how people are compensated. Additionally, in the U.S., there are some states that now legally prohibit Cisco and all companies from asking external candidates for their current and historical compensation. Instead of just complying in those states, we are expanding our reach to the entire U.S. and will further expand globally as we work through the details in each country. Our objective is not to just legally comply, but to lead and drive far-reaching change to the industry and beyond.

      • How about ethnicity in the US? Seems to me that for some reason when it comes to diversity we are totally focused on gender while turning a blind eye to a far more extreme situation. Is it because we are politically motivated?

        • Yes, in the U.S. we analyze parity for both gender and ethnicity. There is no political motivation.

  4. I'm having a difficult time with the new way Cisco is going with this. I appreciate the attention, but I don't like what I am seeing in the outcome. It is very challenging for people who have been dedicated to Cisco for years and can't get a pay increase due to the new considerations. Promos are nearly impossible to get and so now many employees won't receive increases, promos and lucky to get RSU's. I'd rather see an increase for yearly cost of living increase then drastically changing to the way we have.

    • Hello - thank you for your comments. I'm not clear on what you mean by the "new considerations" but let me see if this helps. Our focus on pay parity is in addition to our focus on promotions, merit increases, and equity grants. Pay parity adjustments, if needed, are because of pay for similar work considering location, prior experience, performance, and other factors. As far as promotions, merit, and equity, we provide managers with budgets as our affordability warrants. It's been more challenging when revenue growth was flat, even down. We are in the midst of recommendations for promotions, merit, and equtiy grants now but cannot afford to provide for every employee. Managers will have to evaluate performance and recognize the high performers more so. Unfortunately, cost does matter and we do have to ensure that our cost structure as a company is in line with our top line growth. This does affect the degree to which we can afford smaller or larger pay increase budgets. If I'm misunderstanding the intent of your comments, please do let me know!

      • Correct, we do get budgets but with the MRR and the factors that are input, not everyone can receive and more so, I can't give some of the employees that have been here for over 10 years any increase nor a promo because they sit in zone 3 or slightly above. This is going to cause attrition and more so I don't know how to explain to them why they won't get anything when they are performing!!

  5. Is Cisco applying the same standards when employees are part of an acquisition?

    • Yes, we do include acquisitions. The only acquisition not included, however, is Meraki as Meraki uses a different grading structure so we can't compare more broadly across the company. When we conduct our analysis, we look at pay across the company, not just within one organization.

  6. Is this market data available for employees to review? It would also be great if information around the different levels was available. For example, what is expected from a Level 8 versus a Level 7, 9, 10, etc.? What is the pay range for the different levels? Both things would help us have informed, open, and honest conversations with our managers.

    • Managers can certainly share information with employees.

  7. I would love there too be parity between countries on Connected Recognition awards. The type of items that are usually purchased with an award cost the same in every country, so the awards should be of equal in value.

    • The Connected Recognition tool does not use a straight currency conversion but rather a Recognition Purchasing Power Parity Index that is based on 1) a basket of typical recognition items (not a basket of commodities) and 2) Cisco’s approach to the local labor market. This means that awards are reviewed regularly and adjusted to purchase a comparable value of goods across countries and are aligned to Cisco’s local compensation approach. We use this localized index, and not a straight currency conversion, to create fairness across countries. Please do connect with HR Support if you have any additional questions or ideas!

  8. Great!

  9. Promotions without increase in pay hike what is the use, plz implement fairness across globe & set the pay parity right within the teams first.

    • Hi Bhaskar, Just to be clear, pay parity is not about pay changes when one gets promoted, but rather one's pay for the role they're performing given the location, experience, performance, among other factors. We do have parity globally. We evaluate parity globally and have made some adjustments where needed, and we will continue to evaluate parity as part of our regular annual process. As far as a promotion without a pay increase, I would recommend you talk further with your manager to better understand what was considered in reaching this decision. If needed, always know that you can connect with HR as well! Best, Gaby

  10. iWill Equal Pay be expanded to non-U.S. locations soon? Thanks

    • Yes, at Cisco we look at pay parity in every country!

  11. It is unfortunate to see how this serious issue is being politicized. People make different choices which lead to different results. As long there is an equal opportunity we should be fine. And yes, the red color does have strong association with some "culture" and dark regimes around the world.

    Very supportive of equal pay and pay fairness. However, please get rid of the rule where if you make a lateral move and have had an increase in the previous 12 months you don't get another increase (or at least put some sanity around it). I made a lateral move and 11 months prior I had received a 2% pay adjustments so I got no increase. That was almost a year ago. :-(

    • Hi Jason, The guidance we give is that if you received a raise in the last 12 months and then take a lateral move to a similar role, you shouldn't receive pay increase. This was instituted to stop the use of lateral moves as a means of giving an increase - and unfortunately there were those that were doing so to "game" the system. However, if it makes sense that a pay increase should be given because one's pay is low in the range or low compared to peers for similar performance and experience, your manager should escalate it! Hope this helps, Gaby