The Pay Gap Between Men and Women - Case Study Example

THE PAY GAP BETWEEN MEN AND WOMEN Most employees are concerned about more than just having their needs satisfied; they also want their opportunitiesand rewards to be fair. This issue of equality and fairness applies to all types of rewards – psychological, social and economic – and it makes the job of the management complex. J. Stacy Adams’s equity theory states that employees tend to judge fairness by comparing the outcomes they receive with their relevant inputs and also by comparing this ratio (not always absolute level of rewards) with the ratios of other people. Inputs include all the rich and diverse elements that employees believe they bring, or contribute, to the job – seniority, prior work experiences and job performance. Outcomes are the rewards they perceive they get from their jobs and employers; outcomes include direct pay and bonuses, fringe benefits, job security and economic rewards. Employees analyze the fairness of their own outcome/input “contract”, and then compare their contract with contracts of other workers in similar jobs and even with those outside their job. Fairness of rewards (equity) may even be judged in comparison with relative criteria such as gender. Pay was a symbolic scorecard by which an employee may compare his/her outcomes with his/her inputs. An employees’ reaction may be one of the three combinations that can occur from social and pay comparisons – equity, overreward and underreward. If employees perceive equity, they will be motivated to continue to contribute at about the same level. Otherwise, under conditions of inequity, they will experience tension that will create the motivation to reduce the inequity. What is the current status of pay gap between men and women in Europe and in other countries? In the event of social and cultural changes, men and women are no longer limited by the societal expectations that only men should work for the family while women will stay home and take care of the children. The increasing presence of women in the workforce is very essential although some still believe that the hard work of women are being undervalued when it comes to the comparison between wages of men and women with the same occupation. This pay gap is an occurrence that cannot be simply ignored. Statistics from the European Union shows women in Europe get better grades in school compared to men but once they are already part of the workforce European women receive lower pay and lower chances of being promoted to top positions. Aside from compensation and remuneration, the stability of the jobs available for women is also at risk. Another research from the European Union dated 2005 states that on an average rate, an estimated seventy-five percent (75%) of women in the workforce are employed in part-time jobs. Netherlands, Germany and United Kingdom are on the top three countries in Europe with the highest percentage of women employed in part-time jobs. The Organisation for Economic Co-operation and Development, the hourly rates of men in the workforce are 16% higher compared to the hourly rates of women counterparts. Researchers describe this situation as an improvement from how much the wage gap was two to three decades ago. Aside from these findings by the OECD, they also recorded the hierarchy in the pay gap on an international level. Belgium has 6% which is ranked as the lowest. Australia, Denmark, France, Italy, Spain and Sweden have moderate gap percentage records. At 21%, United States and Switzerland are on the topmost position for countries with the highest pay gap. Countries around the world vary substantially in their legal systems, and especially in their relevant employment laws and business practices. A major issue for many firms in the United States revolves around the treatment of women and other minorities. Although Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment based on gender (and other factors), it was not until 1991 that additional federal legislation extended those rights to US citizens employed in a foreign country by an American-owned company. Because global experience is increasingly becoming a prerequisite to promotion to senior management positions, many women are interested in overseas positions offering visibility, challenge, and the opportunity for personal growth. The workplace in many cultures remains a male-dominated domain, with local women systematically excluded from higher managerial roles. Despite the situation success in overcoming past problems possible, one study of 52 female expatriate managers from North America revealed that the vast majority (97%) were successful despite having no female predecessor for a role model in that position. The women attributed their success to their high visibility, cultural sensitivity, and interpersonal skills. The success of these female expatriates should stimulate other firms to focus their selection of expatriate candidates on the identification of similar characteristics in both males and females. What are the possible causes of the continuous existence of Pay Gap between Men and Women? In December 2001, a research entitled The Gender Pay Gap enumerated several motivating factors behind the emergence of the gender pay gap. These factors include human capital differences, part-time working, travel patterns, occupational segregation, workplace segregation and cultural differences. Human capital differences can account for the amount of work that women can provide to increase output in production of labor. Economically speaking, women are described to be not physically fit to perform jobs in factories which require manual work. Aside from this, women have the capacity to become pregnant which may limit their ability to exert effort on manual tasks. This may also cost the company more money for the implementation of their maternal benefits. Pregnant women and new mothers have a number of special rights and entitlements which include: paid time off for ante-natal care and 26 weeks’ statutory maternity leave during which all her contractual rights (except remuneration) continue. It is illegal to let a woman return to work within two weeks of childbirth or within four weeks if she works is in a factory. Statutory maternity pay (SMP) should also be allotted if the woman has completed 26 weeks’ service by the end of the 15th week before the expected week of childbirth (EWC). Women have right to claim automatic unfair dismissal and sex discrimination if they are dismissed for any reason to do with the pregnancy or childbirth. If she is dismissed, employer must give written reasons for the dismissal without having to be asked. Part-time workers which are composed mostly of female workers have the right to be treated no less favourably than full-timers. So, for instance, part-timers are entitled to holiday on a pro rata basis. Employees have the right to the national minimum wage. This stands at £4.85 (£5.05 from October 2005) an hour for staff aged 22 and over. There is a lower minimum wage of £4.10 for those aged 18 to 21 (£4.25 from October 2005), and employees aged 16 and 17 excluding apprentices must be paid at least £3 an hour. Masculine societies define gender roles in more traditional and stereotypical ways, whereas feminine societies have broader viewpoints on the great variety of roles that both males and females can play in the workplace and at home. In addition, masculine societies value assertive behavior and the acquisition of wealth; feminine cultures treasure relationships among people, caring for other, and a greater balance between work and family life. The Scandinavian countries have the most feminine cultures; Japan has a markedly masculine one; and the United States has a moderately masculine culture. What recommendations and suggestions can be used by companies when it comes to eliminating the pay gap issue? A company’s reward philosophy should be simple – they should pay for performance and the better the performance the more they should pay. Most companies have adopted a ‘market based pay’ approach to determining salaries which means they pay according to the value of the job in the market. Companies should be dedicated to the principles of employment and pay equity. They should be committed to taking steps to facilitate the integration and promote the full participation of previously under-represented designated groups in the work force and encourage the utilization of the talents of all employees in order to realize the business objectives of the companies Employers should also be committed to implementing an Employment Equity Program to ensure that all groups of peoples, including people with disabilities, aboriginal people, members of racial minorities and women are given equal opportunities in the areas of employment. More specifically, no person will be denied employment opportunities for any reason unrelated to his/her ability to do the job. Firms should attract talented people through competitive compensation, benefit and work life practices; motivate corporate and individual performance by linking incentives to key strategic success criteria, strongly differentiating rewards based on personal performance; and promote long-term career relationships through multiple career path and growth opportunities, offering flexibility to meet employee priorities at various life stages. The Equal Opportunities Commission and other organizations aim to protect the rights of women in the workforce. Employment law is a complex area that is full of pitfalls. Getting it right means keeping in touch with developments, thinking out your policies and implementing them with care. Getting it wrong is easier, but could be extremely expensive. Diversity in Communications Research on gender-based communication styles has begun to show some fascinating diversity between the two groups. Numerous studies have explored whether men and women use different (learned) communication styles. In general, men and women display marked diversity in the way in which they communicate at work. Men emphasize power, while women stress rapport; men are more likely than women to claim credit for accomplishments; men tend to downplay their uncertainty rather than admit it; women ask questions to learn more, while men fear that asking questions will make them look ignorant; women make ritualistic apologies, exchange compliments with each other; men look for one-up chances and seek recognition. Overall, men speak directly, while women prefer an indirect approach. REFERENCES: Even, William and David Macpherson. 1994. "Gender Differences in Pensions," Journal of Human Resources, 29(2):555-587. Goldin, Claudia. 1990. Understanding the Gender Gap. New York: Oxford University Press. Leonard, Jonathan. 1984. "The Impact of Affirmative Action on Employment," Journal of Labor Economics, October, 2, 439-463 Solberg, Eric and Teresa Laughlin. 1995. "The Gender Pay Gap, Fringe Benefits, and Occupational Crowding." Industrial and Labor Relations Review, 48(4): 692-708. Waldfogel, Jane. 1998. "Understanding the `Family Gap in Pay for Women with Children." Journal of Economic Perspectives 12(1):137-56. Wootton, Barbara, 1997. "Gender differences in occupational employment." Bureau of Labor Statistics, Monthly Labor Review, April, pp.15-24. Read More