Eliminating the pay gap: An exploration of gender equality, equal pay, and a company that is leading the way
McElhaney, K., Smith, G.
K McElhaney, G Smith - University of California, Berkeley, 2017 - icrw.org
Summary
The research paper "Eliminating the Pay Gap: An Exploration of Gender Equality, Equal Pay, and A Company that Is Leading the Way" by McElhaney and Smith (2017) seeks to clarify the often-misunderstood term "equal pay," analyze the status of pay equity in the United States, and present Gap Inc.'s journey as a leading example in achieving gender pay parity. The authors' purpose was fourfold: to define "equal pay" and outline the current pay landscape, to share insights from Gap's experience for other companies, to identify areas for Gap's continued leadership in gender equality, and to recommend strategies for standardizing equal pay efforts across the private sector. The methodology for this study involved an extensive literature review, a detailed analysis of Gap Inc.'s internal pay data, and interviews with various Gap employees, including members of its executive team. The paper notes that despite women constituting nearly half of the U.S. workforce, a significant wage gap persists, with women earning approximately 79 cents for every dollar earned by men in 2014. Even when controlling for observable variables like job type, women still earn 93-95% of their male counterparts' salaries, a disparity attributed to social norms, cultural factors, and unconscious bias. Gap Inc. distinguished itself by becoming the first Fortune 500 company to announce in 2014 that it pays female and male employees equally for equal work globally, after accounting for observable variables. An external management firm statistically validated these findings, confirming no significant gender wage difference at Gap Inc. globally or within its major regions. The company's success is linked to a culture emphasizing gender equality and inclusion, characterized by collaboration and strong relationships, which fosters women's advancement. Gap Inc. also maintains a rigorous annual system for analyzing pay data and empowering managers with this information to ensure ongoing equal pay. The implications suggest that while achieving pay equity is an ongoing process, companies can learn from Gap's approach by focusing on cultural transformation, robust data analysis, and transparent policies to support women in ascending leadership roles.
Key Findings
- * Despite women comprising nearly half of the U.S. workforce, a persistent gender pay gap exists, with women earning significantly less than men, even when controlling for similar work. * Gap Inc. achieved pay parity for equal work between its female and male employees globally by 2014, becoming the first Fortune 500 company to do so. * A company culture rooted in gender equality, inclusion, collaboration, and strong relationships is crucial for fostering women's advancement and equal pay. * Regular and robust analysis of pay data, coupled with empowering managers with this information, is a key mechanism for identifying and addressing pay disparities. * Achieving gender pay equity is an ongoing process that requires continuous commitment and is not a one-time destination.