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.
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Back to the good old days

Once upon a time, people joined an organisation and remained in it for their entire career. In what was known as the ‘psychological contract’, organisations looked after employees’ training and development and their career progression and in return, they were rewarded with loyal service.

That model pretty much died a long time ago. An exception is US multinational GE Energy, which has offices in Australia and New Zealand. They’re serious about retaining staff, particularly engineers and technicians, and not just in the short term, either. They want their staff to stay with them for their entire careers because, as Sharon Daley, head of human resources (who has been with the company for 30 years herself), says:

‘When someone walks out the door, you’re losing intellectual property and human capital, as well as institutional experience and corporate knowledge. And that’s hard to replace …’

GE Energy is also keen to retain older workers, too, who they believe can be important mentors and teachers.

Part of GE Energy’s retention success lies in the fact that they recognise that people go through different periods in their lives; sometimes they need to work part time, have flexible hours and/or job-share, for instance. Accommodating individual needs, combined with a great employee value proposition and ongoing learning and career development fosters employee loyalty. Employees are so loyal, in fact, that GE Energy’s retention rate is a remarkable 95%.

You can find out more about GE Energy here. Source: ‘People power’ by Sue O’Reilly, the deal, The Australian Newspaper, July 2012.

Discussion questions

How do you foster employee loyalty in your work team? Do you think it’s worth every organisation’s time and energy to try to retain employees? When good employees are hard to find, how important is the psychological contract and long-term employment? What do you do to accommodate employees in different phases of their lives? How easy do you make it for team members to come to you to discuss ways tp make their working lives easier and balance their work and home lives?