We live in an interesting world now, ever since the orange man has declared DEI less important in the US. What resulted was a mass divestment from all DEI initiatives and even restructuring in the way some major not-for-profit organizations apply for funding.
Yes, they completely eliminated DEI language from all their policies, programs, and marketing materials!
But even in the times like this, we can reflect back and think about how we can communicate the value of DEI better.
And, in the increasingly analytical world, it will ALWAYS come back to metrics we choose.
What Doesn't Work: Throwing Money at the "Problem"
The biggest challenge we faced in the previous iteration of DEI is that we focused largely on the representation metrics.
How many women we have in leadership?
How many racialized individuals?
How many people with children?
All of this is based on an important assumption that these metrics are important and should be measured against. Where the challenge arises, however, is in the second derivative thinking:
Why are they important exactly?
Sure, we can throw terms like diversity of thinking, increased performance, social justice and equity. However, it is very difficult to measure if diversity of thinking actually improves as we add more people of certain identities.
Indeed, how do you even measure diversity of thinking?
And going further, how do we measure the impact on the business.
The problem is further exacerbated by attaching specific representation targets and going further to attach executive bonuses for meeting these targets.
Then the initiative becomes about hitting the target to take home more pay. But does this actually improve anything within the organization.
Especially when executives start sandbagging the numbers or being too lenient on certain employees to meet the quota.
No. This approach to diversity does not work in the long run.
What gets measured gets done. But we also know, that when measure becomes a target, people will optimize the measure, not the thing the measure actually supposed to represent.
Which DEI Metrics Bend, and Which Ones Hold
Not all DEI metrics behave the same way.
While some metrics look great on paper, and collapse under incentives. Others can hold their shape under pressure.
Let's take a look at a few.
The Gameable Targets
These metrics look like clean outcomes, which is exactly what makes them dangerous.
Overall representation percentage. A leader under bonus pressure can hit this three cheap ways: hire fast at the entry level where the volume is, reclassify existing roles to change the denominator, or push one group's numbers while ignoring whether those people stay. You hit the target and fix nothing.
Hiring diversity in isolation. This one is trivial to game. Hire aggressively, hit the number, collect the bonus. If those hires leave within a year and no one is paid on retention, the revolving door costs you a fortune while the scorecard stays green.
Raw pay gap. Noisy and perverse under pressure. A leader can improve the headline by shifting who sits where, without moving anyone's actual pay fairness. You've optimized the number and left the problem in place.
The pattern is the same across all three. Each is a count you can move without improving the underlying condition, and money makes people very creative about finding those shortcuts (knowingly and unknowingly).
Yet, did we actually create a long term change?
Questionable at best.
More Robust View
These are harder to fake, because faking them requires actually doing the thing you wanted.
Regretted attrition differential by group. You cannot pressure someone into staying without it showing up somewhere else in your data. To move this number honestly, a leader has to fix the reasons people leave. That's the behavior you were trying to buy.
Promotion rate parity. Fairly robust, as long as you've defined levels clearly so no one games it with title inflation (which happens all the time). It rewards building the pipeline rather than papering over the snapshot.
Adjusted pay gap. Because it controls for role, level, tenure, and performance, the easy shortcuts don't work on it. The only way to move it is to correct the pay decisions it exposes.
Accommodation fulfillment time. Operational, concrete, and hard to fake. A leader lowers it by actually running a faster, better accommodation process.
Notice what these share.
Each one requires real change to the system, not a reshuffle of the count, so paying on them pushes behavior in the direction you wanted.
Don't Attach Incentives to these Metrics
Inclusion and belonging survey scores. These are your single most honest read on what it's like to work at your company. The moment you tie a bonus to them, that honesty is gone.
If managers are paid on their team's belonging score, some of them will lean on their teams to answer positively. Others will coach responses, or quietly discourage the unhappy from filling it out. Within two cycles, the survey stops telling you the truth.
You will have spent money to blind yourself to the one thing you most needed to see.
Measure it. Review it. Act on it. But keep it out of the comp plan.
Gameable Metrics Are a Hidden Liability on Your Finance
Think about a gamed metric the way you'd think about earnings a company inflated to hit a quarterly target.
The number looks good today.
The reality underneath is deteriorating. And the gap between the two is a liability that hasn't been booked yet. And you always have to pay the piper.
When a leader hits a representation target through fast hiring and then loses those people, the company recorded a "win" and absorbed a real loss. Replacement costs, lost productivity, and a workforce that now trusts the process a little less.
The companies that win here are the ones that refuse to pay on numbers that can be faked, even when those numbers are the easiest to explain to a board.
That restraint is your edge. Your competitors are busy attaching bonuses to representation percentages and quietly training their leaders to game them. You can build an accountability system that rewards the real thing instead: actually cultivating DEI.
The payoff is a workforce whose reported numbers and actual condition are the same number. That alignment is worth more than any single target, because it protects eLTV, the lifetime economic value of the people you're trying to keep.
The CHRO Playbook
You can hold executives accountable for DEI outcomes.
You just have to be deliberate about which lever you pull.
1. Pay on flows, not stocks
Tie compensation to regretted attrition differential and promotion rate parity, not to headline representation.
Flows are hard to fake and forward-looking.
They reward a leader for fixing the machine that produces representation, rather than for staging a one-time snapshot the week before the report runs.
2. Never put the survey in the bonus
Keep your inclusion and belonging scores completely out of the comp plan.
Review them in every business unit. Ask hard questions when a group's score drops. But the instant you monetize a survey, you lose the honest signal it was giving you, and that signal is far more valuable than any bonus it could ever justify.
3. Pair every target with a guardrail
If your board insists on a representation target, refuse to let it stand alone.
Pair it with a retention guardrail, so a hire that leaves within twelve months doesn't count toward the goal. That single condition removes the cheapest form of gaming, because now the fast, superficial hire earns nothing.
4. Hold the system accountable, not just the number
Put process metrics in the scorecard alongside outcomes.
Was the annual pay equity review actually completed. Was promotion calibration run and documented. Did the hiring funnel conversion improve at every stage. These are things a leader controls directly, and they're much harder to fake than a single outcome count.
K
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