A Woman’s Value(s): Evolutionary Psychology and the Differences in Compensation Packages for Male and Female Top Executives
“A Woman’s Value(s): Evolutionary Psychology and the Differences in Compensation Packages for Male and Female Top Executives,” by Christine Shropshire, Erika Hayes James, and Peggy Lee asks the question: What are the psychological aspects that may account for the pay gap between male and female executives? The authors use multiple samples and methodologies to try to answer this question. For example, they include the top executives of the largest 1,000 U.S. firms from 1990 to 2003, and they interview board of director members who have been involved in hiring and compensating CEOs.
Although the disparity between men’s and women’s wages has lessened over time, as recently as 2003 women were earning less than $0.80 to the dollar of their male counterparts. Previous research has tried to explain this pay gap economically and psychologically.
The economic explanations include demand side versus supply side arguments. The demand side focuses on employers’ behaviors. For example, employers may stereotype men and women and solicit them for different types of work. The supply side argument points to workers’ choices and posits that men and women choose jobs according to perceived gender roles.
Some psychological theories about wage disparity include differences in self-confidence between men and women; men tend to overestimate their abilities while women typically underestimate theirs. One implication of this phenomenon is that men will be drawn toward more stereotypically masculine jobs that pay more, and women will choose jobs characterized to be feminine or that require less time or labor intensive work. Much of the previous work on the gender wage gap has been conducted for individual contributor jobs and entry or middle level management. There is little research on the pay disparity at more senior levels.
Hypotheses based on these ideas and generated by the authors include:
- Male executives will be paid more than female executives.
- Female executives will have a higher proportion of variable pay as opposed to fixed or guaranteed pay.
- Pay disparity between men and women will increase over time spent on the job.
- A compensation gap will be greater at higher levels of the organization, where there are fewer women.
The research supported all of these hypotheses. It allowed for matching male and female executives in time of appointment, industry, firm size, and occupation. The study explored the influence of time and hierarchy on compensation for men and women, and it was the first to include a multilevel sample of the top executives in the largest firms.
The authors then suggest that ideas associated with evolutionary psychology provide some insight into persistent wage differences between men and women. Evolutionary psychology considers how psychological factors have evolved over time to structure social behaviors. One example is that gender differences reflect the evolution of role responsibilities between men and women in society, and that these differences have implications for what and how people negotiate. As part of their study the authors interviewed members of boards of directors’ compensation committees and other compensation specialists to determine the role of negotiation in the wage gap. Based on these interviews, the authors propose:
- Women will emphasize aspects of work that will assure flexibility, whereas men will prioritize money in negotiations.
- Men and women will differ in the extent to which they are perceived as assertive in negotiating compensation because they have a different risk tolerance.
- As a result of ingrained patterns of thinking about gender roles, female executives will be perceived as a riskier investment than male executives by firms.