ESG | Social | Diversity, Equity and Inclusion | Pay Balance
As part of Cummins’ leadership culture, we seek to inspire and encourage all employees to reach their full potential.
We recognize that bias can create barriers to individual success and advancement. If left unchecked, biases can negatively impact hiring decisions, promotion practices, and pay distribution. To create an environment in which talent decisions are free of bias, our policies, programs, training and detection processes must be effective.
We have a strong commitment to our stakeholders and to ourselves to prioritize pay equity and the closure of identified pay gaps. Our compensation policies and processes are designed to ensure employees are paid equitably for substantially similar work. Ensuring equity in our pay systems and the closure of pay gaps is critical in creating an environment that enables our employees to achieve their full potential. We apply multiple processes and methods to ensure pay equity and pay gaps are reviewed and addressed on a timely and ongoing basis.
A pay gap calculation is different from a pay equity review. An organization can have equal pay, and still have a gender pay gap.
Pay Gap Analysis –Our Pay Gap analysis calculates the raw pay gap or difference in average wages between male and female employees, or among race or ethnicity groups. A pay gap is most commonly driven by the underrepresentation of a demographic group in more senior and higher paying roles. At Cummins, closing pay gaps is part of our diversity, equity and inclusion work.
Pay Equity Analysis –Our Pay Equity analysis is a more refined statistical analysis that examines equal pay for employees doing similar work across diverse employee groups. A pay equity analysis will indicate whether reward and talent management practices resulted in the intended outcome of fair and equitable pay.
Gender Pay Gap Reporting
At Cummins, we are driving initiatives to increase the representation of women within the business and bring greater gender balance into our workforce at all levels. External interest in gender pay fairness is evident, as several countries where we have operations have enacted regulations mandating gender pay gap reviews and reporting.
UK Gender Pay Reporting
Cummins in the UK is required by the UK Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 to publish statutory calculations every year showing how large our pay gap is between our male and female employees.
It is important to note the gender pay gap is different to equal pay, which is about pay of men and women for equal work. An organization can have equal pay, and still have a gender pay gap. The mean gender pay gap is the difference in the average hourly pay for all women compared to all men. The median identifies the middle point of a population. The median pay gap is the gap between the hourly pay rate for a woman at the mid-point, compared to the pay rate of a man at the mid-point.
Analysis of the 2020 figures shows we have a small gender pay gap in our Cummins U.K. companies. Overall, the mean pay gap is 3.1% and the median pay gap is 4.5%. By comparison, the national gender pay gap across all businesses in the U.K. shows the median pay gap to be 15.5%. There are some factors that influence our results, including having fewer women in senior management roles and lower proportions of women within engineering roles.
You can read more about our work to improve gender balance in the Cummins in the UK 2020 Gender Pay Gap Report.
- 2019 Report: Cummins in the UK 2019 Gender Pay Gap Report
- 2018 Report: Cummins in the UK 2018 Gender Pay Gap Report
- 2017 Report: Cummins in the UK 2017 Gender Pay Gap Report
France Gender Equality Index
Cummins is required by law in France to complete the Gender Equality Index which gives a score out of 100. The Index score is based on a set of scored factors with an overall possible score of 100. These factors include pay gap, the differences in the proportion between men and women who gain promotion or raises, women’s pay increases during maternity leave and women in the company’s top 10 highest paid roles.
Cummins France achieved an overall score, in 2020, of 89. While Cummins scored well, we are continuing our work to improve and progress in this area.
Australia Workplace Gender Equality Reporting
The Workplace Gender Equality Agency (WGEA) is an Australian Government statutory agency that promotes and improves workplace gender equality. Each year Cummins is required to complete a detailed questionnaire providing information relating to 6 “gender equality indicators.” Unlike in France and the UK, WGEA publishes the gender equality questionnaires, but not the accompanying gender pay data. To learn more about Workplace Gender Equality in Australia visit www.wgea.gov.au.