Monday, October 25, 2010

Pay for Performance leads to Bias

This is a study done by MIT researcher Emilio Castella. I found the article's link at You may have to subscribe as a member to get to the link. This website is worth it -- and its free as long as you don't mind the occasional email touting a book or a conference or webinar. I've actually attend two webinars as a result of joining the 'free website.

The study concludes what is becoming more and more obvious to those of us following equitable compensation practices. The practice of wage setting must be as open and transparent as possible. In this study employees who received similar performance ratings were in fact not given the same pay raises. The folks who were responsible for setting pay took the liberty of fine tuning the pay adjustments. The same formula was not applied to all employees resulting in bias. Oops.

Here's the MIT sloan link:

Tuesday, October 19, 2010

Motherhood and the Wage Gap

Just found this article courtesy of the Society for Human Resource Management. See link above.

I found this section of interest, especially the last sentence:

"Previous studies on wage differences by gender have found that roughly half of an observed 20 percent gender gap cannot be explained by the usual factors that drive wages, such as experience, hours worked, occupation, industry, age and the like," said report co-author Beata Caranci, deputy chief economist at TD Economics. "The research leads us to conclude that exits from the labor force, most often related to family or motherhood—not gender—are the culprit behind this 'unexplained' wage gap."

Here's what I know -- one of the logical properties of equality we learned in high school math....

The transitive property states:

* For any quantities a, b, and c, if a = b and b = c, then a = c.

Wage gap logic:

Exits = 'unexplained' wage gap
family or motherhood = Exits
'unexplained' wage gap ≠ family or motherhood

The math doesn't add up to me. Also, I presume motherhood still means female since 99.99999999% of mothers are women (could be more but I'm leaving room for speculation).

I just really can't draw any more conclusions around this report. I'll let you try. Feel free to post a response.