Introduction
The compensation is a reward for an entity (individual or corporation) in return for a work performed or services rendered. The amount of compensation and payment are provided either by simple uses or through contractual arrangements (freely negotiated between parties or resulting from collective agreements or company agreement) (Perryman et.al, 2016). The compensation is directly linked to the amount of effort and performance that has been delivered and it also has nothing to do with gender. However, it is usually influenced by the gender, which has consequentially become a social dilemma. Gender and compensation are taken into the context of wage income inequality between men and women, and is commonly defined by a gap of income between women and men (also expressed as a percentage gap of human revenue). Therefore, this paper took into consideration that how compensation and gender are interlinked in this modern business arena. It also discusses the main causes for this situation, as well as, major implications that can be undertaken by the authorities to shrink the gap while reducing the influence of gender role over compensation.
Gender & Compensation
Gender and compensation are often found to be interlinked and the inequality of compensation between men and women is the subject of debate among scientists, sociologists, and economists in order to measure the share due to the genetic differences between the sexes, economic choices, or preferences (less remunerative occupation, hours worked, breaks in professional careers) or gender discrimination etc. For instance, women may sometimes be paid less than men in the same job situation in terms of age, skill, experience, or hierarchical position. This pay gap due to the influence of gender reflects the inequality and discrimination that persists in the labor market mainly at the cost of women. Major causes are interrelated and complex. In 2014, a report of United Nations showed that working women received lower wages as compared to men regardless of their experience, age, and other professional factors (Perryman et. al, 2016). In the United Kingdom, the average salary of women is 79% of the salary offered to men. This ratio is found to be 60% in Japan, 78% in France, and 74% in Germany. However, considering the developed nations, Scandinavia and Sweden outshine with their highest rate of compensation equality between genders i.e. 91% and 87% respectively. In contrast, Paraguay and Botswana are on the top worst with 53%. Qatar and Switzerland outperformed in reversing the job inequality by 194% and 133% respectively. Another recent report commissioned by ITUC (International Trade Union Confederation) demonstrates that the average pay gap is found to be 15.6% based on the data collected from the surveyed 63 countries (Campos, 2015).
Causes of Gender Influence on Compensation
The major factors that are found to be affiliated with the gender pay gap are varied. Various research projects of the Federal Ministry of Family Affairs, Youth, Women, and Senior Citizens has shown that traced back the main causal relationships of the gender and compensation back to the following four causes (Grund, 2015).
Women are missing in certain higher-paying occupations and industries, as well as, on the higher levels of the career ladder. This is also called the horizontal and vertical segregation of the labor market. This means that one of the causes of the gender role of compensation is the under-representation of women in management positions as it supposedly brings the structural problem, when women reach leadership positions and requires reconciling work and family (Campos, 2015).
Women interrupt and reduce their work due to family-related reasons. In other words, men do far more over-time with high compensation supplement and also operate with fewer career breaks.
Individual and collective bargaining cannot equally and sustainably contribute to stopping the evil review towards typical women activities (Davies et.al, 2015).
At the same time, the influence of gender over compensation factors itself produces a continuous disincentive for women employment and leading towards poorer income prospects to low work inclination. Longer career breaks of women due to pregnancy, and other responsibilities lead to an unequal pay. This pay gap is both a consequence of gender roles and on the other hand, it strengthens the gender hierarchical responsibility sharing in partnerships. Women who are unemployed singles, divorced, or widowed are provided with the lower income. Therefore, the risk of poverty tends to be higher in these families as a result of this gender discriminatory influence (Spencer et.al, 2016).
Implications
The consequences of gender affected compensation and consequential pay gap can negatively contribute towards limiting the economic growth due to the concentration of capital. Although the situation is somber and requires a comprehensive surgery of various affiliated systems, procedures, and authorities; however, below mentioned are the few major implications that could bring about a considerable difference in reducing this influence of gender roles over the compensation factors.
The government should formulate stringent policies regarding equal work opportunities and more flexible employment terms while considering the natural role of a female within the society, which innately call for greater malleability (Spencer et.al, 2016).
Compensation factor within the organization should be kept performance-based and not gender-based. Women employees should be given a better term of employment while facilitating them with greater resources to maintain work-life balance.
Procedure on salary negotiation should be kept unbiased and employers should not endeavor to convince female candidates on lower earning terms.
Women should be offered increased educational and career choices in order to maintain the gender balance in the corporate world.
Labor market segregation should be controlled through ethical code and legislations (Grund, 2015).
Conclusion
The above discussion concludes that gender significantly impacts the compensation of an individual in the contemporary business environment. It also concludes that women predominantly suffer from this gender role influence. On average, women have lower earnings because they work in female occupations that are less paid. Also, these occupations have job content, which is associated with female characteristics and are monetarily devalued. However, men are more likely to work in more prestigious jobs that are associated with the male-force characteristics and enhanced monetary terms.
Bibliography
Campos, J. E. (2015). Gender Pay Inequality. Retrieved From http://digitalcommons.csumb.edu/cgi/viewcontent.cgi?article=1488&context=caps_thes on March 30, 2016
Davies, R., McNabb, R., & Whitfield, K. (2015). Do high-performance work practices exacerbate or mitigate the gender pay gap?. Cambridge Journal of Economics, 39(2), 537-564. Retrieved From https://143.167.2.102/polopoly_fs/1.247223!/file/F1_davies.pdf on March 30, 2016
Grund, C. (2015). Gender pay gaps among highly educated professionals—Compensation components do matter. Labour Economics, 34, 118-126. Retrieved From http://www.econstor.eu/bitstream/10419/96719/1/dp8112.pdf on March 30, 2016
Perryman, A. A., Fernando, G. D., & Tripathy, A. (2016). Do gender differences persist? An examination of gender diversity on firm performance, risk, and executive compensation. Journal of Business Research, 69(2), 579-586. Retrieved From http://www.sciencedirect.com/science/article/pii/S0148296315002143 on March 30, 2016
Spencer, E. S., Deal, A. M., Pruthi, N. R., Gonzalez, C. M., Kirby, E. W., Langston, J., & Wallen, E. M. (2016). Gender differences in compensation, job satisfaction and other practice patterns in urology. The Journal of urology, 195(2), 450-455. Retrieved From http://www.sciencedirect.com/science/article/pii/S0022534715047631 on March 30, 2016
