Female Executives versus Male Disparity of Income in USA

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Table of Contents

Explanation of the problem
Proposed solution
Arguments against the proposed solution
Conclusion
Works Cited

Explanation of the problem

The essay is an examination of disparity of income between female and male executive officers in the United States of America. Ideally gender pay gap refers to the ratio of female to male medium annual earnings among full-time year-round employees (Taekjin 259).

It is worth noting that gender gap in earning particularly in top jobs in the U.S.A has attracted the attentions of scholars, politicians as well as individual employees. The result is endless debates on how the problem can be solved (Bartels 23). In a study done in 2012 by the University of Illinois, male executives pocket higher pay compared to their female counterparts; men receive $1,443,600 in 2000 dollars while female are paid $1, 018,100 in 2000 dollars.

This represents a difference of approximately 40% (Taekjin 277). It is worth to note that fewer females become executives as compared to males. Additionally it has been shown that women assume more junior positions and are more likely to exit from their positions faster than men; the rate stands at approximately 4.5% as compared to 3.5% for male.

Sadly, although the pay received by female executives has been increasing over the years as compared to that of their male counterparts, it is held that women have to wait for about 98 years for parity pay (Taekjin 266).

This is despite the fact that they have had equal voting rights from 1928 (Babcock and Lasclhever 126). Statistics shows that very few women who are executives earn salaries plus bonus equal to their male counterparts, an example is Irene Rosenfield who works for Kraft Foods. From the 500 biggest organizations only 15 women are included in the list.

Pay disparity can be seen considering what Nooyi Indra of Pepsi earns; she pockets $10.7 million while her McDonald male counterpart Skinner James earns approximately $20 million (Goodley par. 2). Experts in the field of compensation have attributed this problem partially to the propensity of women to choosing straight forward salary and bonus package over stocks and option laden one (Albanesi and Claudia 89).

Previous literatures also pointed out that the gender pay gap is as a result of differences in education level and work experience. According to the U.S Constitution, this differences in compensation amounts to discrimination, thus there is need to help resolve the problem as soon as possible.

Proposed solution

As suggested by Taekjin 267 there is no doubt that addressing gender pay gap will bring a number of advantages to both public and private sectors. For instance it makes an organization to be an employer admired by prospecting employees, reduced rates of employees turnover, prevent the business from being viewed negatively by the public, and create employees who are motivated and satisfied.

To that effect there are a number of strategies that will help address this problem; however before adopting any strategy there is need to understand where the disparity exists.

Using pay equity audit in both private and public sectors is one strategy that will help address the issue. Ideally this is where the pay rolls data of employees; for this case executive officers are closely examined. Together with the human resource department gender pay gaps are identified. The finding will then be used by the compensation committee to address the problem. It is worth noting that pay equity audit kit is capable of generating graphs as well as tables which clearly shows gender pay gaps (Bartels 39).

It has been noted that once the areas of disparity are identified, steps such as increasing bonus among others to those who earn less may be initiated through thorough consultations between and among the relevant stakeholders. It is worth noting that there is also need to have in place a high pay commission which will oversee that gender pay gap disparity is addressed (Goodley par. 4).

Another strategy is to adopt best practice initiatives, this will help in addressing the specific needs particularly concerning female executives by pointing out areas that will help improve equal opportunity and develop policies towards attaining the same.

Having an accountable and transparent policy about executive pays, offering a flexible working environment to female executives and having a proportionate number of females and males in the remuneration commission are a few of the strategies that will help curb the problem. Organizations which had a female representative in the compensation commission ensured that total compensation as well as other long-term financial benefits for women went up by approximately $300,000 representing about 35% increase (Taekjin 272).

Over 80% of business organizations do not have a female representative in the compensation commission. Although having a woman in the commission is not directly linked with reducing gender pay gap, their presence results in career success of other women; this counters the notion that leadership positions are meant for men.

This in the long run will help address the problem (Gayle, Limor and Miller, 234). On the same note, there is need for the government as well as trade unions to adopt award and dissemination strategies. Companies seen to foster and solve the problem are awarded with various prizes. This will encourage other firms to follow suit in addressing gender pay gap.

The government ought to pass legislations that will compel firms not to discriminate between female and male employees when it comes to compensation.

Since there are current provisions in the constitution stipulating that men and women should receive equal or same wage, organizations that defy this should be held accountable. Additionally legislations which will make organizations to provide female same career and professional development opportunity is highly called for since this will help curb the problem of skills, knowledge and experience.

There are also opportunities when the government will allow women to engage in collective bargaining when it comes to compensation. Lastly and more importantly, it has been suggested that women need to be taught the art and science of bargaining for their total compensation. As noted previously, the inability to negotiate for a competitive package is partially to blame for the current situation (Taekjin 260).

Arguments against the proposed solution

Those opposing the proposed strategies have their valid reasons. For instance they have established that there is no statistical significance between having women in the compensation commission and reduction in gender pay gap. Thus it is useless to assert that having women representatives will offer any desired solution (Black, Amelia, Haviland, Sanders and Lowell, 642).

Additionally in situation where the government will pass legislations that will compel organizations to follow certain rules such as equal pay; this will discourage identification of talented individuals who are core to organization success. Similarly, it will be seen as a bureaucratic measure and might scare investor.

Lastly there is the notion that all the afore mentioned strategies including passage of legislation supporting reduction of gender pay gap are not necessary as the gap is linked to the choice of occupation and time spent in the place of work. Thus it will be illogical to reduce the gap since males tend to spend more time in their profession (Babcock and Lasclhever 186).

Conclusion

The paper has analyzed the issue of gender pay disparity in the United States of America. It is a fact that female executive earn much less as compared to their males counterparts and are more likely to leave their jobs.

To curb this problem there is need for women to master the art and science of negotiating for better compensation, passage of legislation by the federal government to support initiatives of reducing the gap as well as adopting best practices such as having transparent compensation policies.

However, there are those who oppose this initiative holding the view that it is not necessary since males and females hold different choice of profession and the time spend working.

Works Cited

Albanesi, Stefania and Claudia, Olivetti. Gender and Dynamic Agency: Theory and Evidence on the Compensation of Top Executives. Columbia University: Columbia University Press, 2008. Print.

Babcock, Linda and Lasclhever, Sara. Women Dont Ask: Negotiation and the Gender Divide. Princeton, N.J.: Princeton University Press, 2003. Print.

Bartels, Larry. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton: Princeton University Press. 2008. Print.

Black, Dan A., Amelia, Haviland., Sanders, Seth and Lowell ,Taylor. Gender Wage Disparities among the Highly Educated. Journal of Human Resources, 43.2 (2008): 630-659. Print.

Gayle, George-Levi, Limor, Golan, and Miller, Robert A. Promotion, Turnover, and Compensation in the Executive Market. Tepper School of Business, Carnegie Mellon University: Carnegie Mellon University Press, 2011. Print.

Goodley Simon. Women executives could wait 98 years for equal pay, says report. 2011. Web.

Taekjin Shin. The Gender Gap in Executive Compensation: The Role of Female Directors and Chief Executive Officers. The ANNALS of the American Academy of Political and Social Science, 639.1 (2012): 258-278. Print.

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