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In Tarzan v Jane, Tarzan gets the bigger bonus

Sun, 14th Sep 2008
14 Sep 2008: The Observer - Page 8 - (779 words)
Business & Media: Business: Opinion: In Tarzan v Jane, Tarzan gets the bigger bonus
By:

THE SUBJECT of women in management evokes the same stifled groans these days as feminism. Response to the latest report from the Equality and Human Rights Commission, which earnestly estimates that it will now take 55 years for women to achieve parity in the judiciary, 73 years in FTSE boardrooms, and 200 (apparently the same as it would take a snail to crawl the Great Wall of China) in Parliament, ranged from an irritated 'yes, yes, we know it's slow it's a matter of waiting for the culture to catch up', to an equally dismissive, 'well, we can't help it if women make different choices, can we?'

How very 1990s, is the subtext: now can we move on to something that's more, well, important?

Of course the EHRC figures indicating that in 12 of 25 fields of work women at top level are losing ground to men rather than gaining it could be a blip. But taking them with other recent findings, it's hard to avoid the conclusion that management is as unreconstructed as ever and equilibrium, let alone parity between men and women, as unlikely as finding Elvis on the moon.

Last year, for instance, researchers at London Business School's Lehman Centre for Women in Business found that women were unlikely to thrive in organisations where fewer than 30 per cent of senior executives were female - ie, most.

Now comes a truly extraordinary study of senior executive pay by a team from Exeter University and Tilburg in the Netherlands, which throws a sharp and unforgiving light on the assumptions about the nature of men and women managers' performance at work.

In a study presented to the annual meeting of the US Academy of Management last month, the researchers compared the pay of 96 matched pairs of men and women executive directors doing similar jobs at listed UK companies between 1998 and 2004. They discovered not just a 19 per cent gap in total pay (a median pounds 257,000 for women and pounds 316,000 for men), which was even larger than expected but also far more striking disparities in bonus payments. Basically, women's bonuses change very little however well or badly the company does. Men, on the other hand, are punished much more for poor performance but hugely more rewarded for good.

Thus, to take the extreme cases, in the worst performing companies women did better than men in bonus terms, taking home top-ups of pounds 71,000 compared with pounds 32,000 for men. But that difference was insignificant compared with the gap that opened up when performance improved: for companies moving from bottom to top of the performance table, male bonuses soared by 263 per cent (to pounds 151,000) while the increase for women was 4 per cent (to pounds 73,000). Men got nine times more benefit from improving company performance than women.

What explains this discrepancy? Many observers believe it is due to fundamentally diverging beliefs about the impact and effectiveness of men and women managers. So, put crudely, men's dramatic bonus changes reflect traditional stereotypes of top male executives as dynamic risk-takers whose actions have a decisive effect on company performance (for both good and ill) while women's timid additions reflect an equally stereotypical view of female passivity, low impact and weak appetite for risk. The extent of the caricature came as a surprise to the research team. 'We expected to find that women got smaller bonuses than men,' says Michelle Ryan, one of the co-authors, 'but not that they would hardly vary no matter what the company performance was. Women are credited with neither kudos nor agency.'

The danger of self-fulfilling prophecy is obvious. As salaries are proxies for credibility and expected impact and influence, low-paid women will tend to get less good jobs than their qualities warrant, the authors speculate, in turn reinforcing the gender stereotypes of nurture and communality at the expense of drive and ambition, and causing ambitious women to leave or turn off. This 'organisational apathy' to women, they charge, is the very antithesis of equality.

It is hard to know what to be most depressed about in the catalogue of myth and misapprehension revealed in these findings. It's not just about women: the gender stereotypes are equally crude on each side. What the bonus disparities suggest under the fake rationality of laboriously calculated pay-for-performance schemes is a Tarzan and Jane model of management, in which the attributes of management manhood are as exaggerated as those of management womanhood. Mine's bigger than yours yours is more cuddly than mine. As long as such Neanderthal attitudes persist, women will continue to be underrated and disappointed, men overrated and more likely to take stupid risks, and all of us suffer the consequences.

The Observer, 14 September 2009


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