PayPal CEO Dan Schulman on exactly how the company closed its pay gap

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PayPal CEO Dan Schulman on exactly how the company closed its pay gap via CNBCMakeIt

When Dan Schulman spun PayPal off from eBay four years ago, no one could tell the CEO whether the company was paying its employees fairly.

PayPal's HR team worked with two outside consultancies to create a process to evaluate pay and performance to make sure the company is rewarding based on merit, without bias. The evaluation includes a dozen categories, including whether employees have met specific performance targets and applied skills such as strategy, vision, communication and collaboration. Managers rank employees performance across those categories on a scale ranging from"developing" to distinguished."

One of the managers who's been implementing this intensive pay process over the past four years is M.J. Austin, PayPal's Senior Director of Technical Product Management. She's a military veteran and a parent who returned to the workforce after taking time off with her young twins, since then she's been promoted five times in 10 years. She was surprised to find that even she had unconscious biases.

"It actually makes it a lot simpler, because it's very clear what the objective framework says, and how to evaluate your employees," she says."From a management perspective, it's like following step 1, 2, 3, and getting that done." Austin says it's helped her communication with her employees about their performance, and reduced the need for them to ask for promotions, when it's on the table three times a year.

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