Less than a third of managers are women
Not even a third (29.2 percent) of the major management positions in Germany were held by women in 2021, as reported by the Federal Statistical Office (Destatis). In the USA, too, it can be observed that men are promoted much more often. That’s why Alan Benson from the University of Minnesota and his colleagues Danielle Li (MIT, National Bureau of Economic Research) and Kelly Shue (Yale, National Bureau of Economic Research) evaluated the data of around 30,000 executives of a US retail chain between 2011 and 2015 . Her study “‘Potential’ and the Gender Promotion Gap” was published in the summer. It correlates performance reviews and promotions with executive demographics.
Unjustified assessments of potential
Between 2011 and 2015, the company carried out so-called “Nine Box Ratings” before promotions and classified the performance and potential of employees on a scale. The result: seven percent more women than men received the best possible rating in the performance category. Nevertheless, 28 percent more men were rated very highly in the potential category and promoted more often (13 percent). At least about 50 percent of the promotion gap is therefore due to the fact that the performance does not justify the rating in the Potential category – the female employees are underestimated.
In addition, according to Benson et al., the female executives at the retail chain systematically outperformed their male peers with the same nine-box rating, but left the company less often, which ought to rank their in-house potential higher.
Managers keep the best performing employees on their own team
In their paper, Benson, Li and Shue discuss possible reasons for the unjustified, patriarchal nine-box ratings. With reference to earlier studies, they cite classic gender roles as a particularly problematic vicious circle: More men are hired as stereotypically good superiors, which strengthens gender roles, which is why men are still or increasingly preferred to be promoted. Also, managers would often keep the top performers on their own team rather than promote them. While this is flattering, it is not conducive to a career. That being said, executives typically earn more than employees with lesser responsibilities. This creates the unadjusted gender pay gap, which was 18 percent in Germany according to Destatis 2021. For women and men in the same position, on the other hand, the wage gap was six percent.
The study has a solution ready – the companies only have to participate
In the study, the research team suggests that companies should admit their own mistake and raise the rating of female employees in the potential category by default. In this way, the gender promotion gap and thus part of the unadjusted gender pay gap can be corrected. Benson et al. write: “This particular measure is difficult to implement. It could result in managers choosing women from the outset [noch] rate worse to compensate for the gender-specific ‘bonus’. Still, the data suggests that companies benefit by de-biasing their otherwise informative estimates of potential.”
Olga Rogler / Editor finanzen.net
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