Modern HR linked to wage gap

Teamwork, pay-for-performance contribute to gender wage gap

Teamwork and pay-for-performance arrangements, though highly fashionable among HR professionals, are a contributing factor in the persistent wage gap between men and women, according to Statistics Canada.

A recently released study, The “Who, What, When, and Where,” of Gender Pay Differentials, looked, for the first time, at the contribution of specific workplace practices to the wage gap.

“What I do is look at things like high-performance workplace strategies. You hear that buzzword quite a bit but my question was, ‘What does that mean?’” said Marie Drolet, author of the study, based on Statistics Canada’s Workplace and Employee Survey, conducted in 1999.

She found men are more likely to work in teams, for example, and people who work in these groups are paid more.

“Women were less likely than men to work in teams. Only 29 per cent were involved in self-directed workgroups — the most intense form of teamwork — compared with 36 per cent for men,” states the release that accompanied the full study.

Similarly, men are also more likely to work in firms that offer pay-for-performance alternatives (such as incentives, gainsharing, profit sharing and merit pay) than women, and people who are in those arrangements earn more money, said Drolet.

Globalization also plays a factor since 11 per cent of all men and only six per cent of women work for foreign firms. These firms pay more because they are typically more productive and employees have access to better technology and more innovation than Canadian firms.

These three factors — teamwork, pay-for-performance and foreign ownership — account for a “small but not negligible portion” (seven per cent) of the hourly wage gap between men and women in 1999, according to Drolet.

The study is the latest to attempt to explain the wage gap. Previously, it was generally accepted that about 50 per cent of the wage gap could be explained by the differences in worker characteristics of men and women (such as experience and education). By examining the workplace, Drolet was able to account for 62 per cent of the gap.

In 1999, women earned an average of $17.14 per hour while men made $21.54 per hour. In other words women were paid an average of 80 cents for every dollar a man earned. After taking into account both worker and now workplace characteristics, women earn roughly 92 cents for every dollar earned by men; the eight-cent gap remains a mystery to researchers.

The fact of the matter is there are still male and female jobs and many jobs where women are disproportionately represented (like clerical or front-line retail) aren’t likely to use teamwork, or pay-for-performance models, said Dallas Cullen, chair of the women’s studies program at the University of Alberta.

Monica Townson, an economist and author who studies women and the economy, said another modern trend — contingent staffing — is contributing to the persistent pay gap between men and women.

The growing practice of cutting costs by using contingent workers over full-time permanent staff will exert downward pressure on women’s wages because more women are more likely to end up in those often lower-paid positions then men, she said.

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