Executive pay for women. hundred years’ war

Aug 31st 2011, 13:27 by B. R.

WILL it be a century before female managers in Britain earn the same as men? That is the claim today from the Chartered Management Institute (CMI). It has released the results of a survey, which shows that male executives earn, on average, over £10,500 more than their female counterparts for doing the same job – £42,441 compared with £31,895. Women’s salaries may be rising faster than men’s (2.4% in 2010 compared with 0.3%) but even so, says CMI, at those rates it will take 98 years for women to catch up – thus giving the headline-writer an irresistible angle.

In truth, this figure does not pretend to take into account factors that will change over the next hundred years, such as culture, legislation and demography. Nor, seemingly, does it extrapolate from historical trends. Nevertheless, it contains some thought-provoking insights. Most intriguingly, the survey found that among junior executives there does in fact seem to be pay parity: indeed, the average pay for female managers at the bottom of the ladder, £21,969, is slightly more than the £21,367 average for males (research published by the Institute of Economic Affairs in 2008 also came to a similar conclusion). Since there are more junior executives than senior ones, that means that for the majority of women in all management grades, equality has arrived. However, as soon as they start to climb the ladder, the discrimination returns.

So what should we conclude from this? There are several contributing explanations. Firstly, one shouldn’t doubt the existence of a glass ceiling. Male-dominated boards like to fast-track managers who look a bit like them, and may accordingly pay higher salaries to retain talented men. Older men in high places may also be squeamish about mentoring young women, fearing how that might be perceived, leaving females without champions within a company. And added to all of this, men often have the advantage of a continuous career, uninterrupted by childbirth, during which they can nurture their network.

Research from Harvard Business School has also suggested that women face a double whammy in salary negotiations. Not only are those who set compensation less likely to cave into women’s demands, but women themselves are also less likely to be pushy. And even when they are, it can work against them. According to Hannah Riley Bowles, who conducted the research:

It’s a natural thing to say, “Buck up a little bit. You’ve got to act more like the guys.” But there’s a good deal of evidence to show that telling women to act more like men isn’t always good advice. One reason why we see gender differences is that the world treats men and women differently. People have different expectations and reinforce different types of behavior by men and women. For instance, women tend to be more modest in their self-presentation style, but modesty undermines perceived competence. If a man and a woman are self-promoting, both are perceived as equally competent, but the woman is seen as less socially astute and so is less likely to be hired.

Peeping in pay-packets
The CMI’s study will no doubt lead to calls for more pay transparency, giving women the right to check that men in similar positions within their company are not being paid more. This is a tough issue for bosses. Most of us, I suspect, would love to take a peek at our colleagues’ payslips, but equally hate the thought of anyone knowing the details of our own salary.

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Executive pay for women. hundred years’ war