Tuesday, May 10, 2016

The Factors That Lead to a Pay Premium for Women - HBR

by Gretchen Gavett
Originally published: May 9, 2016
Publisher: HBR.org

Women, on average, earn less than men for the same work. This (sigh) isn’t news. But there are times when women do make more than their male counterparts. According to a forthcoming paper in the Academy of Management Journal, women perceived as high-potential — in other words, those “who have the abilities needed to reach the upper echelons of organizations” — receive a pay premium. But according to Lisa Leslie, an associate professor at NYU’s Stern School of Business, and her coauthors (Colleen Manchester of the University of Minnesota and Patricia Dahm of Cal Poly San Luis Obispo), this is only the case for a select few women — and it’s more likely if they work for a company with overarching diversity goals.

I asked Professor Leslie about the implications of her findings, for both women and the organizations they work for. Our edited conversation is below.

HBR: When you examined the highest-paid executives in S&P 1500 companies, controlling for human capital, organizational factors, and industry, you found that women earn 110% of what men earn — and, in the consumer goods and services industry, 120%. Can you talk more about these findings and what they mean?