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Why Women Get Smaller Raises Than Men

A disturbing new study shows that women must overcome manager bias. Here's how to get what you deserve.

posted by Kerry Hannon, August 30, 2012 More by this author

women vs men tug of war

Kerry Hannon has spent more than 25 years covering personal finance for Forbes, Money, U.S. News & World Report and USA Today. Her website is kerryhannon.com. Follow her on Twitter @kerryhannon.


women vs men tug of war
iStockphoto | Thinkstock
Ever wonder the real reason why women are paid less than men?

Women who work full-time earn, on average, 77 percent of what men do. It's a lingering problem — one I've spent lots of time thinking and writing about over the years — and it can't be ignored.
 
I’m well aware of the usual explanations: Some women take time out of the workplace to raise families and care for aging relatives; the types of jobs they do often aren’t as high-paying as men’s and so forth. But I’ve long thought that some other reason lurks beneath the surface.

And now I’ve found it.
 
(MORE: Put Your Retirement Plan Back on Track)
 
Troubling Findings About Women’s Pay
 
A new study published in Organization Science, “Engendering Inequity? How Social Accounts Create, Versus Merely Explain, Unfavorable Pay Outcomes for Women,” found that women got lower raises than men because their managers thought smaller pay increases wouldn't upset women as much as their male colleagues.
 
The findings came from an experiment with 184 male and female managers who took part in a simulation (85 percent of the managers were male). The study’s participants had to determine the raises of their “employees” and were told that the money was limited as a result of the firm’s financial troubles, which were not yet public. The employees each had the same job and level of performance. The only thing that distinguished them from one another was their gender.
 
What did the managers do? They gave their male “employees” 71 percent of the money available for raises, doling out just 29 percent to their female “employees.” (The study didn't break down the raises based on whether the managers were male or female.)
 
“Research on stereotyping shows that people assume that women care more than men do about communality and belongingness and that men care more than women about their own attainment and self-interest,” wrote Maura Belliveau, the study’s author, an associate professor at Long Island University. For this reason, the managers generally felt that the women would be able to recognize the need for the cutbacks and would not feel as personally offended as the men if they received small raises.
 
A New York Times blog said this study suggests that the nation’s wage gap may be attributed partly to the way bosses view working women.
 
“When managers know they can blame the company’s financial woes for their pay decisions, they are likely to give women smaller raises than their male counterparts,” wrote Tara Siegel Bernard. “And that’s because women may be seen as being more readily appeased by such excuses than men.”
 
Implications for Women
 
In my view, it’s all about what managers believe they can get away with.

This research has broad, and upsetting, implications. It suggests that employers think they can use the current fragile economy as an excuse to provide women with lower raises than men.
 
So what can be done to help fix the pay gap?
 
(MORE: Male Entrepreneurs Can Learn a Lot From Women)
 
I asked leadership consultant Selena Rezvani, author of the new book Pushback: How Smart Women Ask — and Stand Up — for What They Want, for her insights on the study. (She offered smart advice on how women can get better raises in my earlier post, “5 Ways Women Can Increase Their Pay.”)
 
Rezvani wasn’t surprised by the study’s results. “In my research experience and observations, when a salary conversation unfolds, women are less likely than men to push for a deeper explanation or prod for resolution of an unsatisfactory situation,” she says. “And if they do push back on an excuse or explanation, they are more likely than men to be seen as difficult.”
 
The raise gap widens with seniority, Rezvani says, which means it’s especially troubling for many women in their 50s and 60s. “Female baby boomers must understand that generally speaking, they will be lowballed when it comes to financial rewards,” she says.
 
Rezvani believes that women aren’t as aware of managers’ perceptions of them as they need to be. As she sees it, this is one reason the pay-raise patterns persist. 
 
Her advice: “Women can share this news with other women to educate each other and get the dialogue going.”
 
How to Get The Raise You Deserve
 
Rezvani offers two tips for women to combat pay discrimination:
  
Be wary of reasons you're given. Continue to challenge explanations offered. This means that when women have a money conversation, they must come well-informed and be ready to back up their position that their manager can and should provide a larger raise.
 
Leverage your network to get informed about pay. In a recent study on which I collaborated with LinkedIn, individuals who networked often were significantly more confident when they approached negotiation conversations than those who didn’t network or did it just a little. Women should equip themselves with pay data from third-party sources and supplement this with research from their network — inside and outside the office. They should know what kind of raises their co-workers have been getting, and they should try to learn what competitors are paying for comparable roles.
 
My personal advice: For information and advice about raises, visit websites like Payscale.com and Salary.com, as well as the Economic Research Institute site, which can show you what a particular position pays where you live.
 
If you’ll be interviewing for a job at a nonprofit, check out the organization’s latest online tax filing (Form 990) to see what its employees and executives earn.
 
Finally, don’t forget to add a dollop of ice to your veins when heading into the boss’s office at review time. Your forcefulness could pay off in your paycheck for years to come.
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