GRALBUS/HHRR-Why Do Women Still Earn Less Than Men?+Extra article & audio

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Why Do Women Still Earn Less Than Men? Analyzing the Search for High-paying Jobs


August 01, 2012, Knowledge@Wharton



Why do women continue to earn less money than men -- approximately 20% less, according to some estimates -- and what can be done about it?

At least half the pay gap reflects the fact that women tend to work in different kinds of occupations and industries than men, a phenomenon known as "gender segregation." Understanding the causes of that gender segregation is a key part of any attempt to address the pay differential.

Wharton management professor Matthew Bidwell and Roxana Barbulescu, a management professor at McGill University in Montreal, set out to understand the causes of gender segregation by taking a different approach than studies that typically look at variances in the kinds of jobs that men and women choose, or at the decisions made by employers during the job application process.

Bidwell and Barbulescu opted instead to look at job applicants themselves to determine whether the decisions they make during their job search process have a significant impact on which offer they accept. Their results are presented in a paper titled, "Do Women Choose Different Jobs from Men? Mechanisms of Application Segregation in the Market for Managerial Workers," forthcoming in the journal Organization Science.

"Much of the debate over earnings has focused on the idea that there are barriers to women getting certain kinds of jobs, and that a big part of this is due to subtle and not so subtle discrimination on the part of employers," says Bidwell. "But most of the available data looks at the jobs women end up in, which reflects a series of decisions by both the employee and employer." The challenge was to separate out data that deal primarily with how women view the employment landscape even before starting the job application process. Do those views, for example, lead women to systematically choose different, and lower-paying, occupations than their male counterparts?

The two researchers analyzed data on 1,255 men and women entering the job market as they were graduating from a large, elite, one-year international MBA program. Such a group is far from representative of the population at large. However, "studying MBA students is particularly valuable for exploring segregation into some of the best-paid and most influential jobs in society, which are the kinds of jobs in which women have traditionally been under-represented," the authors note in the paper.

Barbulescu surveyed the students about their job interests at the beginning of the MBA program, and then again at the end in order to find out what kinds of jobs they applied for, where they got offers and what jobs they ultimately accepted.

The researchers' main finding was that women were significantly less likely to apply to Wall Street-type finance jobs, somewhat less likely to apply to consulting jobs, and more likely to apply to jobs in general management, most notably internal finance and marketing. Not coincidentally, the finance and consulting jobs that women avoided were also the ones that were most highly paid.

No surprises there, but the researchers dug deeper to see what might explain these results. To start, they broke down the different influences on job search decisions into three different factors: applicants' preferences for specific rewards from their jobs, such as money or flexibility; the ability of applicants to identify with particular kinds of jobs, which often reflects how compatible those jobs are with other ways the applicants see themselves; and the applicants' expectations that an application could succeed.

The researchers argue that each of those factors might be influenced by gender role socialization, which shapes our basic beliefs about the behaviors that are most appropriate for men versus women, and about the kinds of skills that accompany those behaviors. For example, if women are expected to play different roles in the workplace and at home than men, then they may also look for different rewards from their work, such as pay, intellectual challenge, flexibility, work/life balance and so forth.

Four Nights in a Hotel

Specifically, the researchers looked at expected work/life satisfaction with regard to 19 different job types, and found that women were significantly less likely than men to apply for jobs where work/life satisfaction ranked low. "This explained why women weren't applying for consulting jobs," says Bidwell. "The hours are not that much worse than investment banking jobs, but the expectation is that you will be staying in a hotel four nights a week. And that doesn't change. With investment banking, you might work very hard, but you usually sleep in your own bed, and the hours tend to trail off as you get more seniority."

The second decision factor shaping applications is how people identify with different jobs. Bidwell and Barbulescu found that women identified the least with stereotypically masculine jobs, and they tended to apply to industries that usually employ a higher proportion of women. The third decision factor is whether individuals believe their applications for certain jobs will be successful: It may not make sense for applicants to pour a lot of time and effort into applications for jobs they do not expect to get.

Bidwell and Barbulescu found that at the beginning of the MBA program, men and women showed the same level of confidence that they would get an offer for a specific job in most of the fields they might apply to -- except investment banking. There are good reasons that women might have lower expectations of job offer success in stereotypically masculine jobs, says Bidwell, and no industry has more of a macho image than investment banking. "Women just didn't think they would get jobs there, so they didn't apply," he notes.

Equally interesting, says Bidwell, is that when women did apply to investment banking jobs, they were just as likely to get them as the men who applied.

"Our research shows how hard it is to bring about change," Bidwell adds." If you tell employers to stop discriminating, it doesn't mean you will end up with greater access for women to better, higher-paying jobs. Instead, it's about changing perceptions of culture. You can imagine that if you have a job that is seen as highly macho and aggressive, and you recruit those kinds of people -- mainly men -- then these perceptions and stereotypes become self-fulfilling. It's a much more insidious way in which jobs become gendered."

The researchers emphasize in their paper that "even when there are no gender differences in the likelihood of receiving a job offer, this does not imply that employers do not influence gender segregation." Indeed, employer decisions may affect applicant behavior "in ways that we could not detect." For example, they cite the climate and recent litigation history of some of the sectors they studied, primarily finance, which may have increased the pressure on employers to hire more women, but doesn't necessarily mean they will promote them into the same senior level positions as men.

The behavior of employers -- and the control they often exert over the workplace -- can clearly affect whether women apply for jobs with their companies. For example, the researchers write, "practices that reduce conflicts between work and family demands could reduce" segregation, and "interventions in the way that jobs are structured and role behaviors enacted to emphasize either masculine or feminine stereotypical attributes could also" lessen segregation. But that is not an easy sell. For instance, as the researchers note, "workplaces with fewer women face less pressure to adapt their working styles to accommodate family demands" -- an example of how segregation becomes self-perpetuating.

At the same time, "addressing these deep-seated organization issues, alongside the more common question of how hiring decisions are made, could be critical for increasing female participation in some of the best-paid jobs in society," the researchers add.

Token Gestures

According to Bidwell, this research paper is one of the first demonstrations that much of the segregation in the job application and hiring processes "happens because of how people apply for jobs rather than because of employer behavior further down the line. And that, in turn, reflects what jobs women are able to identify with, and where they think they will be hired."

When he talks to senior managers, particularly HR people, Bidwell says it's clear that attracting and retaining women are important issues for them, especially because they know that women "are a big part of the talent pool out there, and they also know that customers are becoming more diverse," reflecting a need for the same diversity in companies' employees.

"But it's not just a question of sticking more women in the company brochures, or having more women be part of the company's on-campus recruiting," he adds. "It's a question of trying to change the culture, job perceptions and kinds of behavior that people exhibit. My sense is that everybody talks about this, but I'm not sure how serious managers are about the tradeoffs they would have to make in order to attract and retain more women -- such as reorganizing basic work processes to allow for more reasonable work hours, or changing the norms about acceptable behavior. That's a much harder conversation to have."

Bidwell and Barbulescu acknowledge that their research is based on a very specific population -- highly skilled, highly paid, competitive MBA graduates -- and they suggest several areas for future research. Other studies could examine whether these theories hold true for less-skilled and lower-paying occupations and/or for traditionally feminine settings such as nursing schools. Additional research might look at the process by which applicants learn about jobs, given that some recent studies conclude that "differential access to social networks may shape gender differences in job applications." Researchers could also look more closely at the three broad categories that Bidwell and Barbulescu focus on -- finance, consulting and general management -- parsing out entrepreneurship, for example, which they say has one of the lowest levels of female applications of any job type.

Coincidentally, Bidwell and another Wharton professor, Ethan Mollick, recently conducted a separate survey of Wharton MBA graduates. Among their findings: On average, people in investment banking and hedge funds 10 to 15 years out were making two to three times the amount of money as people in general management. That gap highlights the tremendous economic consequences of women's decisions not to apply to investment banking jobs. On the other hand, the investment bankers had the lowest job satisfaction of any other group. "We surveyed them in 2011," Bidwell says. "It was a particularly miserable time for them, which may have affected the results."









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'Masculine Norms': Why Working Women Find It Hard to Reach the Top + Audio


August 03, 2011,Knowledge@Wharton



Women have been in the workforce for decades, but many will acknowledge that it is still a man's world. According to the most recent data from Catalyst Research, women now make up nearly half (46.7%) of America's workforce and hold 51.5% of management, professional and related occupations. Yet only 7.6% of the Fortune 500 top earners are women, and women make up only 2.6% of Fortune 500 CEOs. Many women say the corner office remains off-limits because the unwritten rules of the workplace continue to favor men.

Companies today "are building on masculine norms," stated Anne Hardy, a vice president of technology strategy at SAP Labs, during a panel at the recent Wharton Global Alumni Forum in San Francisco. Managers need to think about how to create environments in which women can "thrive and grow," she says, and which might inspire them to make a long-term commitment to a company or start their own.

But what would a company built on women's norms look like? Women business leaders and Wharton experts say the workplace would probably function very differently -- and have a different look and feel -- if it were built by and for women.

Wendy McDevitt pictures the workspace resembling the corporate offices of Philadelphia-based Urban Outfitters (URBN), where she serves as co-president of Anthropologie, one of the company's brands. A female-focused fashion and home accessory retailer, Anthropologie has created a workspace to reflect the kind of environment its customers want, McDevitt says. "We almost think of the customer first and then work backwards." The result: koi ponds with running water, a farmer's market, onsite chefs and bicycles that allow for quick jaunts between buildings. "We created a workplace that has a lot of light ... and open space."

Both the founder and CEO of Anthropologie's parent company are men, proving that men can create an office environment with women's preferences in mind, McDevitt points out. Likewise, not every workplace run by a woman would necessarily cater to women's norms. "Personalities of women are very different," she says. "Just because a woman is running a company or brand, that doesn't mean that it would be run in the way that every woman in the organization would want it run."

Yet a look at top women-run companies does reveal some interesting similarities, according to Marsha Firestone, president and founder of the Women Presidents' Organization. The New York-based nonprofit, a membership organization for women entrepreneurs of private companies with annual revenues of $2 million or more, regularly polls its members about how they do business. The most recent surveys show that 100% of the 50 fastest growing women-led companies provide health insurance, 88% provide 401ks, 80% provide life insurance and 66% offer telecommuting. Nationwide, 62% of private companies offer health insurance and 47% offer retirement benefits, according to the Bureau of Labor Statistics; 59% of private company employees have access to life insurance and just 5% have access to flexible workplace policies. "So what I have come to believe is that it's not just anecdotal that women tend to be more nurturing," Firestone says. "I think they are, and I think these statistics verify that."

An office built on women's norms would be more innovative around policy issues that relate to family, suggests Monica McGrath, a human resource consultant, executive coach and adjunct professor of management at Wharton. That doesn't just mean offering flextime -- it means helping women manage their child care responsibilities and family roles while also helping grow their careers. "If women do opt out, it's not because they can't handle their families," she notes. "It's because they feel they really can't advance."

Stereotypes and biases that keep women from advancing are "more subtle" than in the past and "possibly unintentional," but they still exist, McGrath says. She recalls an executive management meeting she once witnessed as a consultant, in which a woman was being considered for an overseas post. Although she was clearly the most qualified for the position, one manager remarked that the woman probably would not want the job because she had two small children. "They actually thought that this was a sensitive remark," McGrath points out. In the end, the company did offer the position to the woman, who happily accepted. "They were not planning to be discriminatory. A company based on women's norms would be more sensitive to these issues."

Coffee Stains, High Heels

The need to address women's norms may be most acute in fields such as engineering, where men predominate. Research shows that women are more likely to leave an engineering career than other fields. According to the National Science Foundation, women make up 20% of engineering graduates, but only 11% of professional engineers are women. "There is little to no respect for women in male-dominated fields," said one woman engineer in a recent report from the University of Wisconsin-Milwaukee called, "Stemming the Tide: Why Women Leave Engineering." "I feel alienated," said another of the survey's more than 3,700 respondents, "in spite of my whole career trying to act like a man."

Many women engineers who left the field reported that it was difficult to prioritize work and family if bosses were not sensitive to those issues, according to the report's co-author, Romila Singh, a professor at the Lubar School of Business and associate director of the Center for the Study of the Workplace at UW-Milwaukee. Another sore spot: few promotions. Women who left engineering reported a lack of training opportunities, being passed over for challenging assignments or struggling with ambiguous roles that left no clear path to advancement. "They had tried many times to get to [higher] positions, and they kept getting stymied in their efforts," says Singh.

Co-author Nadya A. Fouad, a professor of educational psychology at UW-Milwaukee and director of the Center for the Study of the Workplace, wonders if some advancement opportunities for women may slip by because they are communicated casually among men in informal settings, such as the golf course or even the men's bathroom. "If you're in the network, you know what those next steps will be" to take advantage of an opportunity, she points out, "and if you're out of that informal network, you may just not know."

Forty percent of the women surveyed by the center had already left the engineering field. Many who left did so because they could not see a clear way to advance, the authors found. Women also reported being overloaded with work or given conflicting information about their job. Women who stayed, on the other hand, were given clear job assignments, afforded clear opportunities to retrain, and got support from colleagues and supervisors to take on challenging roles. "Organizations interested in retaining their women engineers need to offer targeted training programs aimed at strengthening not only technical skills but also developing overall leadership skills such as strategic planning and performance management," the report concluded.

Sluggish advancement sends women packing in other fields as well.

"We know that women leave jobs at a higher rate than men," says Deborah Small, a professor of marketing and psychology at Wharton. "Part of it might be that they get upset because they find out that someone else got a better deal than them, or they think that they should have been offered something" but were not given the opportunity.

Yet according to Small's research, women's difficulties may be due in part to a failure to negotiate. Small has found that women don't initiate negotiations as much as men do. "It's not that they're not as good at negotiating," she says: It's that they don't initiate the negotiation in the first place.

This could be a problem, since negotiation may be more prevalent in today's workplace than in the past, Small points out. Employment contracts are less fixed and standardized, and perks such as flextime might be open for negotiation long after an employee starts at the company. In a more negotiable work environment, says Small, "it may be that women are at a disadvantage because they are not noticing or not taking the opportunities to negotiate for themselves."

Would a workplace based on "women's norms" make negotiation less prevalent, or make negotiable opportunities easier to recognize? It's impossible to say, Small notes. Today's workplace norms are "not just male norms; they are the norms." Indeed, it is unclear that a workplace designed entirely by women would necessarily be better for women. A lot of research shows that stereotyping and gender bias in the workplace is perpetuated by women as well as men, she says.

Take something as simple as clothing. New research from Wharton hints that gender bias -- from men and women -- may even crop up in response to a stained shirt. Alison Wood Brooks, a doctoral student in Wharton's operations and information management department, examines the double standard behind perceptions of how men and women dress. Her current research targets cleanliness and hygiene -- specifically, how people react to a food or coffee-stained shirt -- and found that men and women with stained clothing are perceived differently. Preliminary results indicate that people appear to react more negatively to women than men.

Brooks plans to expand her research beyond coffee stains to other wardrobe elements, and wonders if the "backlash" that women seem to experience in her stain research will appear with other clothing choices -- for example, casual dress vs. formal, trendy vs. conservative, appropriate vs. inappropriate. "I think the idea of backlash really pertains to every aspect of women's office life," she says. "Women don't ask or negotiate out of a fear of backlash. And it's the same with any aspect of what they wear."

Women face more ambiguity than men about what clothing is appropriate in the workplace, or what messages their clothing might send. Traditionally, men's workplace norms call for a suit, but this doesn't translate well to women's clothing. Even women's suits don't offer a perfect equivalent. Brooks says she is conscious of this in her own department, where the ratio of men to women is about 8 to 1. "They just wake up in the morning and put on pants and a shirt, and they're good to go," Brooks says.

Her challenge is finding outfits that strike the right note: professional but not awkwardly formal, conservative but not uptight, relaxed but not inappropriately casual. Every item of clothing -- from the height of heels to the length of a skirt -- could inadvertently send the wrong message. "There's so many things that I think about, and I know the men in the office don't think about those things because they don't have to," she says.

Meanwhile, at Women's World Banking, where about two-thirds of the employees are women, president and CEO Mary Ellen Iskenderian agrees that an office built on women's norms would take life cycles more seriously, and suggests that even the 9 to 5 routine might be reconsidered if women were running the show. "Women are more about just getting the work done," she says. "In this organization, we have any number of young mothers who work a day, go offline, get the kids to bed and then appear again later in the evening."

The nonprofit's microfinance mission is women-focused, and women dominate the organization's New York offices, but Iskenderian doesn't believe that only women should rule the world. With a board composed of 10 women and one man, she says she is keen to recruit a couple more men. She believes at least three would provide a balance, citing studies of male-dominated boards that suffer communication problems when there aren't enough women "One woman ... is seen as a token, two are seen as in cahoots," she says.

It is when the third woman arrives that all three become accepted as part of the larger group. Iskenderian has discovered the dynamic holds true when it's the other way around. "I have become a greater proponent of gender diversity than I ever was before," Iskenderian notes. The predominance of women on the board creates "a tremendous desire to move towards consensus.... It's a very fruitful forum for ideas and discussion, but what is hard is driving to a decision. I think the group dynamic is a more productive one when there is diversity."




Source: www.knowledge.wharton.upenn.edu