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Microsoft's karmic gaffe is 'opening up the conversation'

CEO Satya Nadella's comment that female employees should trust in karma opened Microsoft's eyes to unconscious bias.

Microsoft CEO Satya Nadella: "Men and women should get equal pay for equal work." James Martin/CNET

There's nothing like a public gaffe to prompt a change in attitude.

After Microsoft CEO Satya Nadella suggested in October that women should trust in good karma instead of asking for promotions or raises, the world's largest software maker says it did some soul searching and now has a new perspective on fair pay.

"It's opened up the conversation," said Julie Larson-Green, chief experience officer of Microsoft's Applications and Services Group and the company's highest-ranking female technical executive.

Nadella's comments, at an event celebrating women in technology, triggered an immediate backlash and underscored concerns about tech companies' gender and ethnic diversity. White men make up nearly half of Microsoft's workforce, according to the company's Equal Employment Opportunity report issued earlier this month. More than 60 percent of all employees are white, and 29 percent are Asian. Women make up less than a third of Microsoft's overall workforce.

Microsoft's Julie Larson-Green: "There are biases about everything." Microsoft

"There are biases about everything," said Larson-Green on December 5 in a 40-minute-long interview. Those biases affect women, but also minorities and even individuals with more introverted personalities. "Are there ways to bring out the best in people? That's been a really great conversation we've had internally."

Larson-Green isn't the only woman in the leadership ranks at Microsoft. Amy Hood, a 12-year Microsoft veteran, was named CFO in May 2013. Women also head business development and human resources.

But Nadella's comments shone a bright light on pay practices in the technology industry. A report published by the American Institute for Economic Research in September said women at tech companies earn $6,358 less than their male counterparts, while women with at least one child earn $11,247 less than everyone else.

"It's not really about asking for the raise but knowing and having faith that the system will actually give you the right raises as you go along," Nadella said at the Grace Hopper Celebration of Women in Computing in an interview that can be viewed here. "And that, I think, might be one of the additional superpowers that quite frankly women who don't ask for raises have."

Larson-Green, who's worked for 20 years at Microsoft, was in attendance at the event when Nadella, answering a question about the best way women should ask for a raise, said they shouldn't but instead wait for karmic payback.

"It'll come back because somebody's going to know that's the kind of person that I want to trust," Nadella said in the October 9 interview with Maria Klawe, a computer scientist, president of Harvey Mudd College, and member of Microsoft's board of directors. "That's the kind of person that I want to really give more responsibility to."

Nadella, who took over as CEO in February and received a pay package valued at $84 million, quickly tweeted he was " inarticulate" about how women should ask for a raise. In an email to employees after his comments were roundly criticized, he stressed the need to close the gender pay gap. "I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask."

The incident has spurred a wide discussion within the company about unconscious bias, according to Larson-Green, who said Microsoft employees had begun taking classes to spot biases.

"Once you see it, you can't un-see it," she said.

It's not just Microsoft that is grappling with the issue.

"Unconscious bias is the big problem in the technology industry," said Vivek Wadhwa, a fellow at Stanford Law School. "[The industry] takes pride in being open, inclusive, and diverse but doesn't realize how it is discriminating."

Microsoft previously had programs for individual divisions that dealt with diversity and equality. Now the company is tackling the issue from a company-wide perspective, Larson-Green said. "We have a leadership program that will make [the programs] more widespread."

Nadella, meanwhile, addressed the issues of diversity at Microsoft's annual shareholder meeting on December 3 after the Rev. Jesse Jackson asked how the company intended to promote a more multicultural workforce.

"We want to have high ambitions for both what we do around diversity and inclusion inside and even outside," Nadella said at the meeting.

Microsoft currently invests $2 billion in minority- or women-owned businesses, representing 7 percent of its total spending and up from $600 million in investments in 2006, Nadella told shareholders. He added that the company is focused on fostering education in science, technology, engineering and math in school, as well as computer science education, with a goal of targeting students in African American and Hispanic communities.

"Diversity and inclusiveness is a critical topic for our time, for our industry, for Microsoft and it's great to have a candid conversation about it, but most importantly robust action," Nadella said.

Wadhwa believes it's more than just lip service. "I have no doubt that Satya Nadella is dead serious and is determined to make Microsoft a shining example of diversity," he said. "He wants this to be part of his legacy."