The gender pay gap that doesn’t go away

For every dollar Australian men earn, Australian women earn a whopping 83 cents – more than 20 per cent less than men. Why is that? Gee, could it be because men mostly set the salaries, do you think? And because it’s been that way for so long, it seems normal? Hmmm.
Of course, there is still extensive occupational segregation, with women clustered in lower-paid ‘women’s work’ jobs but that ‘reason’ doesn’t hold water. When we stack ‘women’s work’ up against ‘men’s work’ that requires similar education, experience, knowledge etc. etc. levels, the pay gap remains. We’re just paying women less than men for doing equivalent work.
Here’s a short (under 3 minutes) and very cute video that shows how capuchin monkeys feel about inequality of rewards for equal work. You will probably laugh out loud, so take care where and when you watch it!
Have you watched it? Good. Hands up if you would feel like rattling your cage if the person in the next cubicle earned more for doing the exact same or an equivalent job as you. Is that why a lot of organisations aren’t transparent about salaries and instruct staff not to discuss what they earn? Hmmm.
But it would pay Australian organisations, as well as the Australian economy, to divy up.
Business Insider examined the gender pay gap in relation to productivity over a 27-year period and found that the effect is negative; unequal pay, lower productivity. Organisations may save a bit of money but they lose more in terms of productivity. Halving the gender pay gap could increase productivity by 3% and eliminating the gap altogether would increase productivity by 5.7%.
It’s a no-brainer, really. When you pay fairly, it’s easier to attract and retain the people you need.
The arguments for social justice and pay equality have failed over nearly five decades. Maybe the argument for productivity and greater profits will do the trick.

The Case for Quotas

Quotas or the merit principle? I’ve seen persuasive cases made for each. But some recent long term meta-research sways me towards the case for quotas.

Traditional measures to increase organisational diversity have failed. Mandatory diversity programs haven’t worked and may make matters worse (people learn the lines and ignore the sentiment behind them). Recruitment testing hasn’t worked (people can ignore the results). Performance ratings haven’t worked (women and people from minority groups tend to receiver poorer reviews whatever their performance). Robust grievance procedures haven’t worked (people don’t trust them and therefore use them only when they’re desperate; complaints drop and organisations conclude there is no problem).

What does work?  Increasing contact with disadvantaged groups works. ‘Gosh, they’re not so bad after all. Wonder what the fuss was about?’

Quotas are one way to increase contact with people from disadvantaged groups. So are formal mentoring and sponsoring programs aimed at people from minority groups. Cross training and job rotation work when they involve contact between different groups of people. High-level diversity task forces that examine the causes of low diversity and find ways to increase diversity work, too.

Compliance isn’t the answer. Steps to protect the organisation from complaints and litigation aren’t the answer. Stealth seems to be a more effective way to increase diversity.

If you want to read more about this study and these and other measures that increase diversity, check out Frank Dobbin and Alexandra Kalev’s article, Why Diversity Programs Fail, in the July-August 2016 edition of Harvard Business Review.

‘Then Get Out’

In June, Lieutenant General David Morrison addressed the Australian public about unacceptable conduct and in particular, conduct that demeans, exploits or humiliates their colleagues. The address was prompted by NSW police and military investigations into a group of male officers and non-commissioned officers whose conduct has brought the Australian Army into disrepute. Lieutenant General Morrison made it brutally clear that those who think that this type of behaviour is “OK … have no place in this army”. The Army must be an inclusive organisation in which every member can reach their potential, he said.

If that does not suit you, then get out.

Everyone, he said, is responsible for the culture and reputation of the Army and its working environment.

If you become aware of any individual degrading another, then show moral courage and take a stand against it.   I will be ruthless in ridding the Army of people who cannot live up to its values …  The standard you walk past is the standard you accept.

Discussion questions:

  • How important do you think it is that the senior person in an organisation takes a strong stand about behaviour that is, and is not, acceptable?
  • To what degree is every person in an organisation responsible for its culture and reputation, and its working environment?
  • As a leader, what steps can you take to make clear the behaviour you want to see in your team and to develop its culture?
  • In what ways can you and your team protect the reputation of your organisation and its working environment?

Gender reporting

According to the Workplace Gender Equality Act 2012  if your organisation employs 100 or more people, it needs to report, publicly and in writing, on over 50 topics in six areas, called gender equality indicators:

  1. the gender composition of its workforce
  2. the gender composition of its governing bodies (e.g. board of directors, councils, management committees, trustees)
  3. relative remuneration between men and women
  4. its employment terms, conditions and practices regarding flexible working arrangements and other arrangements that support employees with family or caring responsibilities
  5. how it consults with employees about gender equality
  6. other matters specified by the Minister, which allows the Minister add other reporting topics through a legislative instrument, such as how employees are selected, promoted, transferred, trained and developed, and terminated; conditions of service; arrangements for dealing with pregnant or potentially pregnant employees and mothers breastfeeding their babies; and how sexual harassment complaints are dealt with.

The report must be made available to employees, shareholders and other interested parties. Organisations failing to report cannot tender for federal government work and some state government work, will not be eligible for some Commonwealth government grants, and will be ‘named and shamed’ — not good for workflow, employee engagement or employer brand!

BNZ’s award-winning gender equality strategy

On 7 March 2013, the  Bank of New Zealand (BNZ) was one of five companies worldwide to receive an inaugural Benchmarking for Change Award from the United Nations Women’s Empowerment Principles group for successfully promoting gender equality.

In 2010, CEO Andrew Thorburn signed up to the UN’s seven women’s empowerment principles and made improving gender equality one of the bank’s top three priorities. Far from a ‘numbers game’, the Bank wanted smart, diverse-thinking women to keep pace with New Zealand’s changing demographics and to add value to debates and decision-making at board and senior management level.

To this end, BNZ raised awareness and understanding about the benefits of gender equality, researched barriers for women at the Bank, identified talented women for development and succession planning, improved recruitment by setting targets for women candidates (every role at BNZ must have women candidates on its short list), measured the roles performed by men and women to ensure they are receiving equal pay for equal work, and established a diversity council.

Barriers to gender equality included the usual suspects: lack of leadership commitment, old boy’s networks, systemic barriers and unclear career pathways for women. BNZ also realised it was losing women at middle management level and introduced career development programs and career paths to retain them. One of the biggest issues for women was flexible working and BNZ now has a standardised flexible working policy that applies to every job in the bank and which is tracked monthly.

As a result, almost half (four out of nine) of the members of BNZ’s executive team are women (up from one woman), and subsidiary boards have 27% female membership (up from 6%).

The Women’s Empowerment Principles (WEP) are seven standards for empowering women that 542 companies around the world have so far signed up to. The seven Women’s Empowerment Principles are:

  1. Establish high-level corporate leadership for gender equality.
  2. Treat all women and men fairly at work – respect and support human rights and nondiscrimination.
  3. Ensure the health, safety and well-being of all women and men workers.
  4. Promote education, training and professional development for women.
  5. Implement enterprise development, supply chain and marketing practices that empower women.
  6. Promote equality through community initiatives and advocacy.
  7. Measure and publicly report on progress to achieve gender equality.

Discussion questions

What are the barriers to diversity in your work team? How would greater diversity (gender and other types of diversity) add value to your team and its ability to meet or exceed its goals? How well does your work team and your organisation embody the seven empowerment principles listed above?