Narrow the Hidden Executive Pay Gap Starting Now

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Woman-on-a-ladder-searchingWomen reaching for the top rungs of the executive ladder will want to watch for the hidden pay gap. As Bloomberg writes, “Even top female workers can’t catch a break when it comes to pay inequality.”

As women move to senior ranks, the gender pay gap widens. Your best career management play? Begin closing it now.

A March 2015 study by the Federal Reserve Bank of New Yorkprovides insight into the hidden pay gap between top male and female executives. Based upon 1992-2005 S&P’s Execucomp data, it covers executive compensation in the S&P 500, the S&P Midcap 400, and the S&P SmallCap 600. The research focused on Chair/CEOs, Vice Chairs, Presidents, CFOs and COOs.

Less Incentive Pay

The researchers found 93% of the pay gap between male and female executives is due to disparate incentive pay – bonuses, stocks granted, and stock options.

Accumulating year upon year into “firm-specific wealth”, incentive pay encourages executives to elevate corporate performance. But the study found overall women executives reaped less of it. Pay disparities held true even when age, title, tenure and firm size were controlled for.

Pay Less Sensitive to Performance

The value of incentive pay such as stock options rises and falls with the company’s performance, but leading a firm to equal strong performance pays off more for men.

Researchers found that a $1 million increase in firm value increases firm specific wealth for a male executive by $17,150 but only $1,670 for a female executive (<10%), since, as

Bloomberg notes,women’s “incentive compensation tied to the company’s equity tends to be lower.”

Pay More Exposed to Under-Performance

Researchers found that pay sensitivity goes in the oppositedirection when firms under-perform: “Overall, changes in firm performance penalize female executives while they favor male executives.”

A one percent increase in firm value creates only a 13% increase in firm specific wealth for a female executive, but a 44% increase for a male executive.

But a one percent decline in value creates a 63% decline in firm-specific wealth for a woman executive, and only a 33% hit for a man. A female executive’s incentive pay is hit twice as hard for firm under-performance.

The researchers found no differences in firm performance by gender to explain pay disparities.

As Fivethirtyeight writes, “Male CEOS get bonuses; female CEOS get blame.”

Less Influence On Pay?

The researchers theorize that men hold more insider purse strings, such as greater influence with Board Members and influence on their compensation.

CFOsummarizes the authors speculation stating the gender gap “does not reflect executive performance but ‘different degrees of managerial power of female and male executives,’ with women ‘less entrenched’, than men and exerting less control over their compensation due to limited access to informal networks, gender stereotyping, and an inhospitable corporate culture, along with their younger age and lower tenure.”

Bloomberg writes, “Men, on the other hand, who are more entrenched in an organization and can cash in favors after years in the industry, are more likely to be able to steer their pay in a way that’s more favorable for them.”

Change Means Transparency

Compensation would not remain one of the hidden, insidious biases still alive in the old boy’s club if met with disclosure.

The researchers call for greater transparency.

They write, “Our analysis suggest that performance pay schemes should be held to closer scrutiny and raises a note of concern for the standing of professional women in the labor market as incentive pay becomes more prevalent.”

Co-author Stefania Albanesi told Bloomberg, “increasing transparency in general in an organization but specifically with how your pay is set relative to others in similar positions is going to be helpful.”

Albanesi notes that it’s important to get transparency sooner. The gap doesn’t magically appear at executive level – it compounds. As incentive pay popularizes at lower ranks, disparities will build annually so inequality has to be addressed early.

“The accumulation is going to be there even when women get promoted, and also possibly if you move to another firm, because usually your past compensation is used in some degree,” Albanesi said. “These differences can be very, very persistent.”

Brave the Discussion

Women can’t afford to keep quiet about pay.

The systemic gap is unlikely to change as long as having children results in a cascading impact on salaries and opportunities for women. Increasing pressure to offer temporal flexibility and returner programs is essential.

But at an individual level, you can push for transparency and initiate the conversation of negotiating your compensation.

As Business Insider points out, women may face a “social cost” of negotiating salary but they can’t afford not to negotiate. Settling early compounds to highly significant salary differences later in your career.

According to Forbes, in a study for her book Women Don’t Ask, Stanford’s Margaret A. Neale found only seven percent of women MBAs negotiated their job offer salary compared to 57% of men MBAs.

Neale explains that if one person negotiates a $7,000 rise on a $100,000 offer and another settles, then 35 years later that $7,000 gap equates to a difference of eight working years to accumulate the same wealth, and that’s if both people experience identical raises and promotions in their career.

When women don’t negotiate, they affirm the pay gap status quo. Strategic salary negotiation is a career and gender equality move.

Let’s bring the pay gap out of the entrenched corner (offices) it hides in and put it on the table.

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Secret Career Weapon: Admitting Your Mistakes Then Learning From Them

Nervous Business WomanWhy is there an expectation in our society that the higher you are within the business hierarchy, the less likely you are to make mistakes?

Whether you are an entry-­‐level analyst or a top-­‐ranking CEO, the potential to make mistakes is equal. What we do after we make them is what distinguishes the leaders from the followers.

And yet, as a society we look so harshly upon failures and mistakes and are conditioned to judge women who make mistakes more harshly than men, especially if they occupy traditional male roles. The study “People in jobs traditionally held by the other sex are judged more harshly for mistakes,” from the Association for Psychological Science calls this dynamic a “glass cliff.”

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Managing Difficult Conversations for Career Advancement

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Nervous Business WomanMary Barra knows something about difficult conversations — and the high price of avoiding them. Not long after she became chief executive officer of General Motors in January, the U.S. automobile giant began recalling millions of cars in response to allegations that the company had failed to correct a defect tied to at least 13 deaths and scores of accidents.

Some GM employees had long been aware of the potential seriousness of the engineering fault. What did executives and board members know and when did they know it?

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Women in China: Chutes and Ladders of Professional Women

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women shaking handsHow easy is it for Chinese woman to climb the corporate ladder in modern day China? Deborah Dunsire, Chief Executive Officer and President of Millennium says, “We have a very well-educated set of women in China who can contribute to the economic dynamism of the country, yet there does still seem to be a gender gap. It’s not a disparity in education anymore and hasn’t been for decades, and it’s not a disparity in the legal framework of work.” Evidently, the main barriers to women in professional services are not educational.

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Despite Our Bias Against Them, Gallup Says Females Make Better Managers

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women shaking handsGallup has polled Americans on their male or female boss preferences for over six decades now. It took until this century for “no difference” (46% in 2014) to consistently become the top answer– an answer which men (58%) are much more likely to express than women (34%).

During all previous years of the study, it’s no big surprise that preference for a male boss took the top spot. Among those with a preference today, men and women still prefer male bosses.

Among men, 14% prefer a female boss and 26% prefer a male boss – which means that among preferring men, 65% pick a male boss. Among women, 25% prefer a female boss and 39% prefer a male boss – which means that among preferring women,61% pick a male boss.

Women are more likely than men to prefer a female boss, but also more likely to prefer a male boss. Gallup points out that total preference for a female boss has never surpassed 25%.

Gallup indicates one of the measures that may contribute to the female boss bias is still too few female bosses. Only 33% of respondents currently had a female boss. But “those who have a female boss are more likely than those with a male boss to say they would prefer a female boss if they got a new job (27% vs. 15%, respectively).”

The Bias Behind Our Preferences

A recent study by Powell & Butterfield published in the Journal of Vocational Behavior sought to understand what drives preferences around male or female bosses, or the lack of preference.

The researchers note that the overall male bias is likely a complicated mix of pervasive gender stereotypes, leadership traits being associated to men, role congruity, societally conferred male status, and think manager-think male prototypes. Other sources speculate female preference in particular for male bosses may lie in fear of the “queen bee syndrome”, bullying by other women, reports of increased stress when reporting to female bosses, or that women bosses get penalized for supporting other women’s career advancement.

But the researchers wanted to investigate how gender identity plays a role in preferences. They asked 455 undergraduate (median age 20) and part-time MBA students (median age 36) about their boss preferences and had them complete a tool that measures gender identity, or to what extent people identify themselves as having (stereotypical) “masculine” traits and (stereotypical) “feminine traits.

Similar to Gallup, they found the majority of participants had no preference about the sex of their boss. But sex-typed respondents (those self-identifying either highly masculine or highly feminine based on stereotypical traits) were more likely to express a preference – and that preference was likely to be consistent with their own gender-identification.

“Feminine” respondents preferred a female boss more than “masculine” ones. “Masculine” respondents preferred a male boss more than “feminine” ones. “Undifferentiated” or “androgynous” respondents, less defined personally by gender, were less inclined to express any preference for their bosses too.

According to Powell, “Our study supports the similarity attraction paradigm that suggests people are more interpersonally attracted to the idea of working with and being around people whom they see as being like themselves.”

If we extend these findings, our preferences or lack of them for the sex of our boss may reflect something about how we gender-identify within. It would seem that more strongly embracing our own feminine traits could open us up more to embracing female bosses.

Women are Better Managers

There are a lot of reasons to embrace female leadership. A recent Gallup “State of the American Manager” report focused on, despite the male boss bias, “why women are better managers than men.”

Fostering Engagement

Gallup found female leaders (41%) are more engaged than male leaders (35%), and make more engaging bosses. This enables them to lead high-performing teams.

The report found “Employees of female managers outscore employees of male managers on 11 of 12 engagement items.” Employees who work for a female manager are more engaged (on average 6%). The highest engagement levels are among female employees reporting to female managers (35%) and the lowest engagement is among male employees reporting to male managers (25%).

Cultivating Potential

Gallup found that employees who report to a female manager rather than male manager are 1.26 times more likely to strongly agree that “There is someone at work who encourages my development.”

The report noted, “This suggests that female managers likely surpass their male counterparts in cultivating potential in others and helping to define a bright future for their employees.”

Another aspect in which female bosses shined was in attention to employee progress. Employees reporting to a female manager are 1.29 times more likely to strongly agree that “In the last six months, someone at work has talked to me about my progress.”

According to the report, “This suggests that female managers, more so than male managers, tend to provide regular feedback to help their employees achieve their development goals.”

Providing Recognition

When employees do make progress or realize achievements, female managers are more likely to acknowledge it too. The Gallup study found that employees reporting to a female boss are 1.17 times more likely to strongly agree that “In the last seven days, I have received recognition or praise for doing good work.”

According to the report, “In addition to encouraging associate development through regular conversations about performance, this suggests that female managers surpass male managers in providing positive feedback that helps employees feel valued for their everyday contributions” and they are more likely “helping their employees harness the power of positive reinforcement.”

“Overall,” the report states, “female managers eclipse their male counterparts at setting basic expectations for their employees, building relationships with their subordinates, encouraging a positive team environment and providing employees with opportunities to develop within their careers.”

Gallup’s recommendation? Companies need to get more female managers in place through use of the great hiring and promoting equalizer of, wait for it: “talent.”

Overall, many advantages exist to having a women as your manager. It’s time both men and women took stock of them.

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Will Gender Equity happen because of Millennial Professionals?

working on a computerThere has been much written about Millennials and the impact they are bound to have on the workforce in the next decade.

Many senior women have talked to us at theglasshammer.com about the challenges of understanding and motivating younger team members. Since there have been academic and anecdotal studies noting the differences in approaches to work between the generations, it is easy to see that our readers are not alone in their experience.

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Is being a pessimist at work bad for your career?

pessimist1Is the office coffee maker half empty or half full? Does simply ‘thinking positively’ help to achieve the desired outcome, or does being too upbeat remove your ability to critically analyze and learn from business and life situations? Does pessimism allow you to spot the obstacles lurking ahead in the distance?

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Office Housework: Lean In, But Don’t Be Leaned On

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working from homeIf you make well-meaning, generous, happy to help contributions day in and out at the office and it goes without recognition or reward, do you make a sound? When it comes to your career, probably not. The truth is when it comes to both moving up and looking after yourself, too much helping might be hurting.

In a recent New York Times article, Sheryl Sandberg and Adam Grant write, “This is the sad reality in workplaces around the world: Women help more but benefit less from it.” After all, there’s a difference between leaning in and being leaned on.

Why We Help

Sandberg and Grant are quick to note that gender stereotypes are at play in creating expectations for women to “pitch in” thanklessly for the team: “When a man offers to help, we shower him with praise and rewards. But when a woman helps, we feel less indebted. She’s communal, right? She wants to be a team player. The reverse is also true. When a woman declines to help a colleague, people like her less and her career suffers. But when a man says no, he faces no backlash. A man who doesn’t help is ‘busy’; a woman is ‘selfish.’”

So it’s no surprise that Law Professor Joan C. Williams, author of What Works for Women at Work: Four Patterns Working Women Need to Know, says that for women, “Saying no without seeming touchy, humorless or supremely selfish is a particularly tricky balancing act.” Women continue to be left “holding the mop”, in the words of Senator Elizabeth Warren, for men in the office. Blogging on leadership, Williams defines office housework as:

“the administrative tasks, menial jobs, and undervalued assignments women are disproportionately given at their jobs.”

“Someone has to take notes, serve on committees and plan meetings — and just as happens with housework at home, that someone is usually a woman,” says Sandberg and Grant.

What happens when a woman says no? A study on altruistic behavior led by NYU’s Heilman tested how male and female employees would be evaluated based on choosing whether to stay late for an important meeting. A man was rated 14% more favourably than a woman for staying and helping. A woman was 12% more negatively than a man for declining.

It’s the equivalent of the “awww” factor daddy gets but not mom when he carries around the baby, and it’s unequally rewarded. Sandberg and Grant state, “Over and over, after giving identical help, a man was significantly more likely to be recommended for promotions, important projects, raises and bonuses. A woman had to help just to get the same rating as a man who didn’t help.”

If you’re finding yourself disproportionately engaged in leading mentor programs, coordinating the interns, taking notes, heading up thankless committees and special side initiatives, ordering the sandwiches, volunteering to stay late, and spending time behind the scenes coaching, you are helping organizational success according to many studies noted in the NYT article.

But the question is at what price to your career and to yourself?

Hindering Your Career

The NYT article stated, “Studies demonstrate that men are more likely to contribute with visible behaviors — like showing up at optional meetings — while women engage more privately in time-consuming activities like assisting others and mentoring colleagues.”

Behind the scenes help is valuable, but when it’s mostly women who are carrying the time and effort commitment on low-valued, low-visibility work, who is free to step up to the high-value, high-visibility opportunities?

“The person taking diligent notes in the meeting almost never makes the killer point,” Sandberg and Grant write in the NYT. And Williams asserts in the Washington Post, “We have to get women out of office housework and onto more projects that really matter, both to them and to their companies, if we want more women to be successful in reaching positions of influence.”

Sacrificing Yourself

Williams writes, “Women are often asked to play the selfless good citizen…by taking on assignments that men don’t want or that the organization doesn’t highly reward.” But what happens when women act selfless, or out of our need to be dutiful or helpful, is we too often neglect ourselves.

Women are more likely to feel burned out at work when it comes to emotional exhaustion, according to an analysis of 183 different studies across 15 countries. According to another study, women’s focus on and involvement with others to the exclusion of taking care of their own self can cause stress and depression underneath.

Being helpful can create personally rewarding interactions, but women need to be careful that they’re not exhausting their own energy and resources while colluding with multiplying expectations upon themselves.

If your identity becomes locked up in being the helpful one, which your gender already infers, then it becomes an expectation you serve and reaffirm. When out of balance, being of service to others at the workplace can mean being of dis-service to yourself.

A Mindset Change

Sandberg and Grant suggest that organizations should chose to value, track, and recognize acts of helping, as well as address the imbalance in assigning this work. They also suggest men could step up to contribute their share and help vocalize the unsung contributions.

In the meantime, they suggest breaking free of the cycle of mop-holding comes down to women, to you: “For women, the most important change starts with a shift in mind-set: If we want to care for others, we also need to take care of ourselves. One of us, Adam, has conducted and reviewed numerous studies showing that women (and men) achieve the highest performance and experience the lowest burnout when they prioritize their own needs along with the needs of others. By putting self-concern on par with concern for others, women may feel less altruistic, but they’re able to gain more influence and sustain more energy. Ultimately, they can actually give more.”

The NYT article pointed out an exec who found more efficient ways – such as a FAQ manual – to address requests for help, as well as caring ways to decline over-stretching. Only then did she make partner. You can be as giving, caring, and considerate in how you say no to others while recognizing your needs and limits as you can be in saying yes.

Women are quick at helping, and it’s part of the path to success, but that doesn’t mean we have to shoulder all the under-valued work at a cost to ourselves.

Perhaps we need to qualify Sandberg’s call-to-action: Lean in, but don’t be leaned on.

By Aimee Hansen

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She Hates You After You Confronted Her – Now What?

Guest contribution by Beate Chelette

It happens to even the best communicators, especially when we are having that kind of day. One thing pushes us to the edge of our tolerance and the voice inside our head says, “You have to confront her about this.” And we do—with disastrous consequences.

The calm yet firm conversation we had intended somehow turned into a much bigger issue than the one we had before. Now she is avoiding you, working around you, and giving you the cold shoulder. The problem is that she may be your boss or a key person within the company. You have a nagging suspicion your confrontation was bad for your career and may have just turned your office life into living hell.

When someone rubs us the wrong way and we want to let them know it, chances are we’ve made judgments based on our PERCEPTIONS of that person or the situation. We don’t know what she (or he) really thinks, feels, or is going through. Perhaps she is dealing with excruciating personal pain. Everyone has a story.

Direct confrontations usually don’t fix anything because they follow the outdated “I win, you lose” model. We are living in a collaborative, communal environment (compared to when gurus where all the rage) and we need to shift our approach.

The key to dissolving the issues you are facing is to identify where the problems lie. In 90% of cases, miscommunication and drawing incorrect conclusions are the root causes. Start by detaching yourself from the situation and look at the issue/problem/incident objectively. Switch the language you use from “you did/I think” to “when that happened/that incident was.”

It’s important to know your desired outcome before you go into fixing mode. Do you want to have a better relationship with your co-worker? Do you want to improve team collaboration, office communication, or work processes? Your primary goal will be the focus of what you say.

Clarifying miscommunications is how we start to repair a strained relationship. It’s also where we apply the first Pillar of The Women’s Code—awareness.

Awareness

Our perceptions are often based on assumptions. Have you ever been furious at someone for what she did to you, only to find out later that she was genuinely trying to help? That’s what happens when we act without knowing the other side of the story. Ask yourself, “What is the real issue here? Was I right to confront her? Did I act on facts or did I act on assumptions?”

Now what?

We start by offering a genuine apology. “I am sorry I…confronted you; called you out in front of the group; made a snarky comment; wrote the one-sided email; acted without understanding where you are coming from and without hearing your story first…”

We try to improve communications. Do this by giving a compliment. Trust me on this—it works wonders! The caveat is that it MUST be sincere or else we come across as fake. Try a simple compliment like: “I admire how fiercely you negotiate; I like how professionally you dress; I appreciate how you lead meetings…”

Most of the time when we give, we get something back. Watch for the sign. If you get a compliment or a nicety in return, you can skip the next step.

If we don’t receive a signal of truce, we’ll need to do more softening. Make the incident impersonal while still taking responsibility. “When the confrontation happened, I don’t know what got into me. I realize it was not appropriate.” Or simply say, “I wanted to make things better, not worse, but my approach backfired. I don’t want the tension between us to continue.” The key here is to take full responsibility for your part. After all, nobody is perfect. Keep it clear and concise, remain apologetic, admit making a mistake, and above all—be honest and genuine.

Our final step is to focus on the future. Don’t allow the conversation to dive deeply into an explanation of the mistake you made. Instead, guide the conversation by painting a picture of what is next. “What can I do to fix this situation? I’d love to hear your ideas on how to avoid this in the future. Would it be helpful if we plan to meet more often or have a daily check-in? What kind of updates would you like from me? I want to make this work…”

We all make mistakes, so we may as do something useful with them. Don’t feed a situation more negative energy. Seek ways to reconcile and resolve the issue as soon as possible. And please share what you learn so others can avoid similar pitfalls.

Let me know how these suggestions help you. I’d love to hear your tips for mending strained relationships!

At her lowest point, Beate Chelette was $135,000 in debt, a single mother, and forced to leave her home. Only 18 months later, she sold her image licensing business to Bill Gates in a multimillion-dollar deal. Today she is a respected speaker, career coach, consummate entrepreneur, Author of Happy Woman Happy World, and founder of The Women’s Code, a unique guide to leadership, and personal and career success that offers a new code of conduct for today’s business, private and digital world.  Determined to build a community of women helping each other, she took her formula and turned her life around into a book Brian Tracy calls “an amazing handbook for every woman who wants health, happiness, love and success!” She spends her time helping people and companies transform leadership and success, sharing her foolproof fix “From Overwhelmed to Awesome.”

Guest advice and opinions not necessarily those of theglasshammer.com

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How to Handle Unsolicited Advice

Women TalkingBy Hadley Catalano

Communication is frequently heralded as one of the most important pieces to a healthy workplace. A notable, and perhaps the most aggravating, form of communication presents as unsolicited advice.

As any recipient of spontaneous feedback, unabashed suggestion, or voluntary recommendation from colleagues can attest, these interactions are typically uncomfortable and unwelcome. While there is no way to prevent co-workers from putting in their two cents, there are some valid reasons not to throw the baby out with the bath water.

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