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Record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting an organization’s employment actions.
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October 09, 2012
Why is there still a gender pay gap?

It surprises many that women still earn an estimated 20 percent less than men, on average. How come? Many HR people, and not a few corporate executives, worry that their organizations are somehow subtly biased against women, and they strive to wipe out that bias. According to a new study, though, the answer may be much more complex.

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What happens in the job market? Two researchers, Wharton Management Professor Matthew Bidwell and Professor Roxana Barbulescu at McGill University in Montreal, focused particularly on applicants’ choices during their job searches. Their research subjects were 1,255 men and women entering the job market after graduating from a large, elite, 1-year international MBA program.

A rarified atmosphere, you say? Perhaps, but Bidwell and Barbulescu focused on the industries and kinds of jobs that generate the highest salaries, looking for the ways in which men and women either sorted themselves out or were sorted out by recruiters. Note that the gender pay gap in the highest-paying jobs exerts a disproportionate influence on the average pay gap all the way down the line.

Two industries Bidwell and Barbulescu set their sights on were such Wall Street-type finance jobs as investment banking and consulting—both sources of very high salaries.

The researchers surveyed students about their job interests before the MBA program and then afterward, to find out what kinds of jobs they applied for, where they got offers, and what jobs they ultimately accepted.

They found that women were significantly less likely to apply for investment banking spots and somewhat less likely to choose consulting jobs than men were. Interestingly, when women did apply for investment banking jobs, they were just as likely to get them as the men who applied.

Take a closer look at motivations. Bidwell and Barbulescu delved deeper, breaking down influences on job search decisions into three different factors:

  1. applicants’ preferences for specific rewards from their jobs, such as money or flexibility;
  2. applicants’ ability to identify with particular kinds of jobs, which tends to be tied to how applicants see themselves; and
  3. applicants’ expectations of whether an application could succeed.

One important aspect of the search is what the researchers refer to as “expected work/life satisfaction,” a factor they tested against 19 different job types. That turned out to be decisive in their findings: Women were significantly less likely than men to apply for jobs in which work/life satisfaction was seen as low. Said Bidwell, “This explained why women weren’t applying for consulting jobs. The hours are not that much worse than investment banking jobs, but the expectation is that you will be staying in a hotel 4 nights a week.”

Apparently, men are more willing to trade that drawback for big bucks than are women—or at least that’s what the researchers speculate. Further, they found, women identified the least with stereotypically masculine jobs, such as investment banking, a reputedly macho culture. From before their MBA program began to after they’d ended, Bidwell and Barbulescu found that women and men showed similar levels of confidence about job offers in most fields—except investment banking.

Is change very slow? Bidwell suggests that it is. He commented, “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.” That is, the pair concluded, women tend to work in different kinds of occupations and industries than men, a phenomenon known as “gender segregation.”

They noted that business practices that reduce conflicts between work and family demands could reduce this segregation. However, “workplaces with fewer women face less pressure to adapt their working styles to accommodate family demands,” so that segregation becomes self-perpetuating.

At the same time, the researchers note, employers continue to be concerned with hiring more women, knowing they’re a big part of the available talent pool and knowing that customers are becoming more diverse.

Bidwell and Barbulescu found that women are more likely to apply for jobs in what they describe as “general management,” including positions in internal finance and marketing. And, on average, people in investment banking and hedge funds for at least 10 or 15 years were making two to three times as much as those in general management. But here’s one more area from which women are shying away—entrepreneurship. Think of the creators—and the money they’ve made—of Facebook, PayPal, and other innovations.

So, are the differences between men and women genetic? Built in with the bricks? Or do they lie in the differences between how boys and girls are socialized—by their parents, schools, and society at large? Even if they’re a mixture, will they change? How fast?

We clearly don’t know the answers yet. Bidwell and Barbulescu’s study, “Do Women Choose Different Jobs from Men? Mechanisms of Application Segregation in the Market for Managerial Workers,” will appear in the journal Organization Science.

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