Advancing Women: Where We Stand Today Janice Fanning Madden Professor, The Wharton School University of Pennsylvania.

Advancing Women:Where We Stand TodayJanice Fanning MaddenProfessor, The Wharton SchoolUniversity of Pennsylvania

• Gender Differences • Glass ceilings, glass walls, pay gap

• Causes of Gender Differences• Discrimination: dislike or stereotypes (implicit bias)• Family-career tradeoffs: employees vs. workplace design

• Eliminating Gender Differences• What works in company policies• What women executives can do

Glass Ceilings

More recent data, Fortune 500?

Includes more than the top 5 executive positions (prior slide), ranging from 7 to 50 per company, and fewer firms that are larger.

More recent data, Fortune 500?

Includes more than the top 5 executive positions (prior slide), ranging from 7 to 50 per company, and fewer firms that are larger.

US Census Data on Percentages of Managers, Executives, CEOs who are Female

US Census Data on Female Managers, Executives and CEOs

Percentages of BAs, Business BAs, and MBAs Awarded to Women, 1970-2008

The Glass Ceiling• Underrepresentation of women

increases going up the management hierarchy • Progress in women attaining senior

management positions appears to have stalled since about 2000except among Fortune 500 CEOs:As of 2012, 18 women CEOs, but only 4 in 2004 and 2 in 2002.

Glass Walls

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Glass Walls

• Women executives are more likely to have professional or non-line (finance, law) than line (president, CEO, COO) executive positions.• Also, retail trade companies have

more women CEOs.

The Pay Gap

Women Earn Less Than Men• Women in the top 5 executive positions earned

22% less total compensation (annual salary plus incentive pay) than men, although their annual salaries were only 11% less than men’s.

• Most, but certainly not all, of the gender gap in incentive pay arises from women being in smaller firms (measured by market evaluation and employees) and in different job titles.

WHY?

• Discrimination• Men dislike women managers• Stereotypical notions (implicit bias) that

women lack skills: decisiveness, leadership, etc.

• Family and career tradeoffs• Accommodating family demands• Workplace design—24/7, no time away,

the “rat race”

Discrimination

Discrimination, which is it:Dislike of working with women orstereotype that women are less qualified

2003 SEC regulation said that corporate boards, not company insiders, set compensation:

– If dislike, gender pay gap decreases after 2003– If stereotype, gap grows after 2003 (because boards have

no direct ways of discovering ability, rely on stereotype)

Discrimination, which is it:Dislike of working with women orStereotype that women are less qualified

2003 SEC regulation said that corporate boards, not company insiders, set compensation:– If dislike, gender pay gap decreases after 2003– If stereotype, gap grows after 2003 (because boards have

no direct ways of discovering ability, rely on stereotype)Gender pay gap grew 19% on average in companies who were affected by regulation, suggesting that stereotypes are the problem.

Discrimination, is it:Dislike of working with women orStereotype that women less qualified

Another study found that stocks decreased 3% on average with appointment of new female CEO, but only 0.5% for new male CEO– No gender difference in change in stock value over

time between firms with male or female CEOs – Women often appointed CEO when firm performance

is in decline, glass cliff phenomena: Patricia Woertz at Archer Midland Daniels, Susan Ivey at Reynolds American, Brenda Barnes at Sara Lee, Anne Mulcahy at Xerox, Mary Sammons at Rite Aid

Discrimination, is it:Dislike of working with women orStereotype that women less qualified

Research supports “implicit bias” as the “discrimination” source of gender disparities in labor market outcomes.Implicit bias occurs when learned stereotypes operate automatically or subconsciously in decision making; our brains automatically map people into categories. This behavior is strong and pervasive; gender categorization occurs for men and for women taking the test.See https://implicit.harvard.edu/implicit/demo/

Discrimination• Discrimination appears more likely to be based on

stereotypical thinking, or implicit bias, then on dislike of women in management.

• Stereotypes are better than dislike as a cause of discriminatory behaviors, because it is easier to correct misunderstandings and reduce implicit bias through education and increasing awareness than it is to eliminate “hatred.”

Family/Career Tradeoffs

Family/career tradeoffs• Women provide more house and family care than

men.• Often, there is hostility at the workplace toward time

off for parental responsibilities, as well as for flexible time schedules.

• Media has reported extensively, and inaccurately, on increasing tendencies for educated women to opt out of demanding jobs for more family time.

Family/career tradeoffsWomen are more likely to take time off.

Women MBAs work: –fewer hours per week (goes from an average deficit of 1.8 to 6.5 hours as experience goes from entry to greater than 10 years)

–more likely to have taken some time out since graduation (less than a year’s gender difference over a career)

–Lead to large earnings penalties for men and women.

Design of Workplace• How “should” less hours or time off affect career?• Would workplace norms be different if women’s

lifecycle needs were the basis of the company’s norms for promotion?• Obviously earn less if work less, other things being the

same.• But should fewer hours or time off when one has young

children mean derailment of career, as opposed to delay?

What Companies Can Do

What matters in increasing women in management • AA Plan• Diversity Committee• Diversity Staff/ in-house attorney• Networking Programs• Family accommodations• Having been sued for discrimination or have a

compliance review from US Dept of Labor• Having women in top management(Kalev, Kelly, Dobbin, ASR 2006)

What does not matter in increasing women in management

• Diversity training• Mentoring programs

What Women Executives Can Do

Women CEOs MatterIn companies with a woman CEO, 11% of top executives (excluding CEO position) are women; for the other firms, only 5% are women.

Women CEOs MatterIn companies with a woman CEO, 11% of top executives (excluding CEO position) are women; for the other firms, only 5% are women.

Women CEOs double the representation of women in top executive positions!And, these women earn more when there is a woman CEO.

Women CEOs Matter: Why?

• Sponsorship/mentoring• Women-friendly policies at firms• Selection: higher achieving women

select firms with women CEOs, or women have an advantage in some industrial sectors.

Women CEOs Matter: Why?

• Sponsorship/mentoring• Women-friendly policies at firms• Selection: higher achieving women

select firms with women CEOs, or women have an advantage in some industrial sectors.

• Women slightly more likely to be mentored (83% v 76%)• Women get less benefit–72% of men, but only 65% of women

with active mentor relationships in 2008 were promoted by 2010.

• Women need sponsors, not mentors

Sponsors• Senior managers with influence• Give protégés exposure to other execs who will help

careers• Make sure protégés get challenging opportunities

and assignments• Protect protégés from damaging contacts with

publicity or senior execs• Fight to get protégés promoted.

Recent study shows that the number of currently influential people an executive has previously encountered in career increases men’s, but not women’s, compensation.

Conclusions• Women face a glass ceiling and glass walls in highest level

management.• Women in highest level jobs earn less due to jobs and to

the types of organizations they manage. • These outcomes are due both to “discrimination” and

“family demands.”• Discriminatory behavior based on implicit bias, which can

be managed and alleviated. • Career effects of family demands probably greater than

they need be if organizations reconsider how norms and talent identification programs are designed.

Conclusions: What Companies Can Do• AA Plan• Diversity Committee• Diversity staff/ in-house attorney• Networking programs• Family accommodations• Rethink norms and benchmarks for promotions• Women in top management

Deals with implicit bias

Conclusions: What Women Can Do• Senior executives– Give protégés exposure to other execs to help careers– Make sure protégés get challenging assignments– Protect protégés from damaging contacts – Fight to get protégés promoted.

• Aspiring to move up the executive hierarchy– Find a sponsor who does the above for you