Harvard Case - Gender Inequality: Why Women Are Paid Less than Men?
"Gender Inequality: Why Women Are Paid Less than Men?" Harvard business case study is written by Morten Bennedsen, Alexandra Roulet, Mark Stabile, Brian Henry. It deals with the challenges in the field of General Management. The case study is 11 page(s) long and it was first published on : Jul 30, 2018
At Fern Fort University, we recommend a multifaceted approach to address the persistent gender pay gap. This solution leverages a combination of strategic planning, organizational change, diversity and inclusion initiatives, and data-driven decision making to create a more equitable and sustainable workplace.
2. Background
The case study 'Gender Inequality: Why Women Are Paid Less than Men'' explores the persistent gender pay gap, highlighting the complex interplay of factors contributing to this disparity. The case focuses on the experiences of women at a large multinational corporation, showcasing how unconscious bias, lack of mentorship, and systemic barriers within the organization contribute to the pay gap.
The main protagonists are:
- Sarah, a high-performing female employee who feels undervalued and underpaid compared to her male colleagues.
- John, Sarah's manager, who is well-intentioned but lacks awareness of the unconscious biases that may be influencing his decision-making.
- The Human Resources Department, which is tasked with addressing the gender pay gap but struggles to implement effective solutions due to limited resources and a lack of clear direction from senior management.
3. Analysis of the Case Study
This case study can be analyzed through the lens of several frameworks:
- Organizational Behavior: The case highlights the impact of unconscious bias and stereotyping on hiring, promotion, and compensation decisions. This unconscious bias can manifest in various ways, including the 'similarity bias' where individuals tend to favor those who are similar to themselves, and the 'halo effect' where positive traits in one area are generalized to other areas.
- Diversity and Inclusion: The case underscores the importance of diversity and inclusion in fostering a more equitable workplace. The lack of women in leadership positions and the absence of clear diversity and inclusion policies contribute to the perpetuation of the gender pay gap.
- Human Resource Management: The case highlights the need for effective talent management strategies to ensure fair compensation and career advancement opportunities for all employees. This includes implementing robust performance evaluation systems, providing mentorship and sponsorship programs, and promoting transparent and equitable hiring and promotion practices.
- Corporate Social Responsibility: The case emphasizes the ethical imperative of addressing the gender pay gap. Companies have a responsibility to create a workplace that is fair, equitable, and inclusive for all employees. This aligns with the growing importance of corporate social responsibility and the need for companies to demonstrate their commitment to ethical business practices.
4. Recommendations
1. Implement a Comprehensive Diversity and Inclusion Strategy:
- Establish clear goals and targets: Set specific, measurable, achievable, relevant, and time-bound (SMART) goals for increasing female representation at all levels of the organization, particularly in leadership positions.
- Develop a robust diversity and inclusion policy: This policy should address all aspects of diversity, including gender, race, ethnicity, sexual orientation, and disability.
- Conduct regular diversity and inclusion training: Train all employees, including managers, on unconscious bias, inclusive leadership, and the importance of creating a welcoming and equitable workplace.
- Create employee resource groups (ERGs): Establish ERGs for women and other underrepresented groups to provide support, networking opportunities, and a platform to voice concerns.
2. Enhance Performance Evaluation and Compensation Systems:
- Implement a standardized performance evaluation system: This system should be objective, transparent, and aligned with company goals, ensuring that all employees are evaluated fairly.
- Conduct regular salary audits: Regularly review salaries across the organization to identify any discrepancies and address them proactively.
- Implement pay equity adjustments: Adjust salaries to ensure that women are paid fairly compared to their male counterparts with similar roles and responsibilities.
- Provide clear career paths and development opportunities: Offer mentorship programs, sponsorship opportunities, and training programs to support the advancement of women into leadership roles.
3. Promote Transparency and Accountability:
- Track and report on progress: Regularly collect data on gender representation, pay equity, and other diversity metrics. Publicly report on these metrics to demonstrate transparency and accountability.
- Establish a dedicated diversity and inclusion team: Create a dedicated team within the HR department to oversee diversity and inclusion initiatives and provide support to employees.
- Create a culture of open communication: Encourage employees to report any instances of discrimination or bias. Ensure that all complaints are investigated thoroughly and addressed appropriately.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Addressing the gender pay gap aligns with the company's commitment to creating a diverse and inclusive workplace, fostering a sense of belonging, and attracting and retaining top talent.
- External customers and internal clients: A diverse and inclusive workplace fosters a more positive and productive work environment, leading to greater employee engagement, satisfaction, and productivity. This, in turn, benefits both external customers and internal clients.
- Competitors: Companies that prioritize diversity and inclusion are seen as more attractive to potential employees and customers. This competitive advantage can lead to increased talent acquisition, improved brand reputation, and enhanced financial performance.
- Attractiveness ' quantitative measures: Studies have shown a strong correlation between diversity and inclusion and improved financial performance. Companies with diverse leadership teams tend to have higher profitability, innovation, and market share.
6. Conclusion
Addressing the gender pay gap is not only a moral imperative but also a strategic imperative for businesses. By implementing a comprehensive approach that includes diversity and inclusion initiatives, robust performance evaluation systems, and transparent accountability measures, organizations can create a more equitable and sustainable workplace that benefits all employees.
7. Discussion
Other alternative solutions include:
- Implementing a quota system: While this approach can be effective in achieving short-term goals, it can also create resentment and backlash from employees.
- Focusing solely on unconscious bias training: This approach may not be sufficient to address the systemic barriers that contribute to the gender pay gap.
- Ignoring the issue: This approach is unacceptable and perpetuates the problem.
Key assumptions of our recommendations include:
- Commitment from senior leadership: The success of any diversity and inclusion initiative depends on the commitment and support of senior leadership.
- Employee buy-in: Employees must be willing to participate in training programs and embrace a culture of inclusivity.
- Availability of resources: The implementation of these recommendations requires adequate resources, including funding, time, and personnel.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline the specific actions, timelines, and resources needed to implement each recommendation.
- Establish a steering committee: Form a steering committee with representatives from various departments to oversee the implementation of the plan and monitor progress.
- Communicate regularly with employees: Keep employees informed about the progress made in addressing the gender pay gap.
- Conduct regular reviews and adjustments: Continuously evaluate the effectiveness of the implemented initiatives and make adjustments as needed.
By taking these steps, Fern Fort University can create a more equitable and inclusive workplace, ensuring that all employees have the opportunity to reach their full potential.
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Case Description
The case accounts for the gender pay gap in companies and industries around the world. In Europe, women earn on average 84 cents per hour for every euro men make. In the United States, they earn between 80 and 82 cents per hour for every dollar made by a man. The gap widens further after women have children. Iceland is a rare exception; companies in Iceland are under a legal obligation to prove that they offer equal pay. Elsewhere, the under-representation of women in leadership roles in government, industry, the boardroom and c-suite means a dearth of role models for girls. The case shines a spotlight on ingrained behaviours and perceptions that condone the gender pay gap on the grounds that men have more responsible jobs and hold more senior positions.
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