"Male" departments are paid significantly more than "female" departments - unless the department is headed by a woman - research team analyses data on European corporations
Women earn an average of 1.2 million euros less per year at board level in large European corporations than their male colleagues. The pay of board members also depends on whether a department is perceived as "typically male" or rather "female". These are the findings of a study conducted by the University of Tübingen, Paderborn University and the Ostwestfalen-Lippe University of Applied Sciences, which was recently published in The International Journal of Human Resource Management.
The study analysed 84 companies, including 16 German companies listed in the Euro Stoxx 50 and/or the Stoxx Europe 50. The two indices track the performance of the largest European companies inside and outside the eurozone. The average total remuneration for male board members in the companies analysed is four million euros per year, while that for female board members is only 2.8 million euros.
In their search for the causes of the so-called "gender pay gap", the researchers came across various effects. "Women are comparatively often in charge of departments that are perceived as "more female" and that are less well paid on average," said Professor Kerstin Pull from the Chair of Human Resources & Organisation at the University of Tübingen. Departments that are perceived as "more female" include, for example, the field of human resources or corporate communications. By contrast, departments such as IT are considered "masculine". Departments perceived as "female" are paid less and are more frequently held by women.
A survey was conducted as part of the study to determine whether a position in a board department is perceived as "masculine". The survey shows that stereotypical perceptions are very pronounced in society and that they correlate with actual salaries: The more a department is perceived as "typically male", the higher the pay for that department. However, women cannot earn higher salaries even if they head "typically male" departments - this privilege is reserved for men.
"Women in 'male' departments are not perceived as suitable candidates. The clear salary disadvantage is surprising because women are actually desperately sought after for board positions," said Professor Martin Schneider, Professor of Human Resources Management at Paderborn University.
"All companies are committed to equal opportunities and are increasingly appointing women to their management boards. The fact that gender stereotypes have such a significant influence on the pay of board members has so far been overlooked," said Professor Anja Iseke from the Ostwestfalen-Lippe University of Applied Sciences. "Yet the tasks of the various departments at board level are very similar: all board members have to think strategically and communicate with the company in the same way."
The team of authors analysed and ruled out a number of other possible causes for the differences in income. For example, the qualifications of the board members - known as "human capital" in technical jargon - cannot explain the differences, as the qualifications of women on the boards of European companies are at least as high as those of men. This was the result of an analysis of LinkedIn profiles and company annual reports.
The team of authors suspects negative effects of salary differences on the development of companies. "The willingness to cooperate in top management is certainly lower with large salary differences. That can't be good for the company," summarised Sarah Diederich from the University of Tübingen. The researchers' recommendation is therefore to equalise pay between departments and individual board members.
The importance of gender pay gap research was emphasised this year by the awarding of the Alfred Nobel Memorial Prize in Economic Sciences to economist Claudia Goldin from Harvard University. Goldin is only the third winner in the history of this prize.
Publication:
Diederich, Sarah; Anja Iseke; Kerstin Pull; Martin Schneider: Role (in-) congruity and the Catch 22 for female executives: how stereotyping contributes to the gender pay gap at top executive level. The International Journal of Human Resource Management.
www.tandfonline.com/doi/full/10.1080/09585192.2023.2273331
