The Effects of Principled Leadership on Worker’s Earning — Pay Inequality

Photo of wallet with money sticking out.

Photo credit: kzinn on Morguefile.com

I remember a story told to me by a retired executive who early in his career managed a small production department of a Southern manufacturer during the ‘60s. There were about 50 employees, 45 of them men, five of them women.

The department worked overtime to handle surges of rush orders salesmen dropped on them that were outside of the production schedule. The department’s employees liked to work overtime since they got paid an extra 50 percent of their base pay for the extra hours worked.

Overtime distribution was a recurrent problem. The employees were sensitive to the assignment of overtime hours, since most of them wanted the extra money, and they were quick to point out when some of the employees received more overtime assignments than others. But, overtime also involved working different jobs in the department–some desirable and some not so.

It was tradition in this department to have women work what was called light duty overtime only. They were restricted to assignments that had less physical demands although, as the retired executive said, the women could handle anything the men could. The net effect of this restriction was that woman worked fewer overtime hours than men.

The employees squabbled frequently. Apparently, some employees had been getting more overtime work than others, and on less demanding assignments than others. And women were cheated out of the best assignments simply because they were women.

When the manager busted through that particular glass ceiling and allowed women equal access to overtime for all assignments, the grumbling stopped in a matter of a couple of weeks.

During those years women production supervisors were a rarity as were women managers. Outside of the fashion and clothing industry it was hard to find a woman manager, and even more infrequently, a woman in the executive suite. And when you did find them, chances are their pay was lower than men in the same positions.

That kind of inequity was rampant in the ‘60s and the decades beyond. It’s still a nagging problem today.

If You Want to Retain Them, You’ve Got to Pay Them

One way to address the problem of pay inequality is to consider what your organization would do if it lost its women, regardless of their jobs or level in the organization. If they’re onboard and performing well, it’s in your interest to retain them, right?

Retaining high-performers is a major challenge in today’s changing business environment. As the economy continues to improve, ­ good employees may not even think twice about leaving. Great organizations view employee retention as a competitive advantage and work hard to retain their most talented people.

Retention starts with culture. To keep your top talent, you need to create an inspiring and energizing culture in which they can thrive. This means having an organization with shared values, openness, and honesty, thereby creating trust and allowing talented people to voice their opinions and share ideas. But most of all it means paying women on a scale equal to their male counterparts.

You have to reward woman employees according to their job performance, but make sure you’re not paying them less than you would men doing the same work. Just like men, women want to be challenged, provided with interesting work, and the ability to make a difference, but they all want equal pay. Recognize that while everyone is motivated in different ways, equal pay is the ground floor requirement. Reddit, the online entertainment, and news website, now has a policy in place which doesn’t allow new hires to negotiate salary. The idea is to eliminate gender bias during salary negotiations, where men who negotiate are often viewed positively, while women who negotiate are often viewed negatively.

 

You’ll be sure to eliminate unequal pay if every leader is held accountable for retaining talented people. Continually look for signs of dissatisfaction. Asking questions and receiving feedback are great ways to find out if people’s needs are being met. It’s also a way to see if your women employees consider their pay fair and equal to job expectations.

These questions will open a constructive dialogue that will allow you to discover talented people’s needs. Once you gain awareness, work quickly to fulfill these needs. Provide continual education and learn new ideas. Remember, though, the foundation for performance is equal pay for equal work. Make it your mantra to eliminate pay inequities.

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