Because I’m worth (no more than four times) it… 

That’s a commitment we make to one another at Kaleidoscope. We will not pay our highest earner more than four times our lowest.

It’s one that flies in the face of prevailing trends. We don’t have a CEO (and that’s another blog…), but the average CEO to median employee pay ratio in the UK is 202:1 (up from 20:1 since 1996). And, more widely, a study reported this week shows the median CEO package has a rate 109 times that of the average UK worker.

That’s about the difference between Usain Bolt’s 100m sprint time and your average tree sloth’s, give or take.

The story is much better in the public sector, with an average executive to lowest earning employee pay ratio of around 12:1. But that’s still Bolt vs a toddler with a pack of Skittles (ok, that one might not be scientifically proven yet…)

So why buck the trend?

Back in 1971, when Ilon Specht – a junior copywriter at L’Oreal – coined the now iconic catchphrase, it carried a deep significance. It was the first high-profile use of a female voice-over in beauty advertising. A symbol of empowerment and change. I’m worth it because of my inherent value as a woman, independent of any man.

“Because I’m worth it” represented the fight for a fairer world. One that was firmly on the path towards reducing gender inequality. But at the same time, a because-I’m-worth-it attitude of a different kind in board rooms across the world was charting a different trajectory for income inequality.

Most of us want to build a fairer world. But income inequality is firing us in the wrong direction.

After 30 years of growth at roughly the same rates across the board following World War 2, the 1970s saw pay for the highest earners begin to increase at faster rates than for the lowest. Today, the wealthiest 10% of households hold 43% of all the wealth in the UK, while the bottom 50% hold only 9%.

Most of us want to build a fairer world. But income inequality is firing us in the wrong direction. At a time when rising inflation is disproportionately affecting lower income households, this could never be more important.

And in our GP surgeries and hospitals we are seeing the causal and compounding effect that poor pay has on health every day. So what can we do?

Put your mouth where your money is 

Getting fairer about pay starts by talking about pay. In many workplaces, transparency about what we earn is taboo, even forbidden. But being open about pay is the first step to noticing unfairness.

Because if we can’t be open about what we pay our highest earners, it raises the question, why? Is it because we don’t want to justify it, or because we can’t?

What does fairness look like in your organisation? At Kaleidoscope, setting out what fairness looks like together, and acting on it, is part of being the organisation we want the future to be.

In terms of pay, for us that means having an equitable system – one that treats everyone without discrimination or favouritism, but not the same. One that recognises our contributions according to a commonly agreed set of criteria. And one that ensures we do our bit to reduce income inequality, not widen it.

It is also one that is very transparent. Our employees set their own salary, taking account of the pay of their colleagues and seeking feedback on their roles and performance to inform their decision.

At the moment, 4:1 is our magic proportion. For you and your organisation your vision of fair pay might be different. But what matters is that you have one.

Pay fairly, or pay the price

We know that creating a more equitable workplace doesn’t just build a better world. It creates higher performing teams.

Our sense of justice at work impacts on our motivation and behaviours, and lower pay ratios are a predictor of increased organisational performance. The business case for pay equity has never been stronger.

So it’s time to pay attention to pay. To prioritise transparency over comfort. And to be the organisations we want the future to be. Or we risk paying the price.