1. Pay Discrimination © Nancy Brown Johnson, 2005

2. Fairness and Monkeys Monkeys and Fairness

3. Scenario 1 Two graduating students are offered a management trainee position by the Big Blue Corporation after completing their B.S. in Business from the University of Kentucky. The woman student’s offer is for $37,500 and the male student receives an offer of $40,000. –Is this pay discrimination? –What additional information would you like to have to determine if pay discrimination exists?

4. Pay Discrimination Defined Access Discrimination staffing & allocation decisions Valuation Discrimination pay received Comparable Worth equal pay for jobs of equal value

5. Glass Ceiling Minorities & women experience barriers to achieve highest ranks of the organization Glass Ceiling Commission Barriers –Assignments not related to career progression –Discounting performance –Lower returns –Limiting access to informal networks –Family responsibilities distract from work performance

6. Equal Pay Act, 1963 Forbids wage discrimination on the basis of sex when: –employees perform equal work in the same establishment skill, effort, responsibility & working conditions –employees perform jobs requiring equal skill, effort, responsibility & working conditions OK to discriminate based upon: –seniority, performance, factor other than gender

7. Instructions: These are embedded graphs. To edit a graph simply double-click anywhere on the graph. When you’re done editing the graph, click outside of the graph to return to PowerPoint. Labels above each column are added in PowerPoint. Four Factors Defined Skill –experience, training, education, ability Effort –mental or physical Responsibility –degree of accountability Working Conditions –physical surroundings and hazards

8. Four Factors Do Not Include Household circumstances such as number of children Why? Four factors focused on work: work related

9. Equal v. Unequal Work Instructions: This is an embedded graph. To edit this graph simply double- click anywhere on the graph. When you’re done editing the graph, click outside of the graph to return to PowerPoint. Equal work –Jobs must be substantially equal, not identical –Judged on actual work performed Unequal work - effort, skill responsibility –must be substantially greater –must consume significantly more time –must have value consistent with pay differential

10. Reverse Discrimination Reverse Discrimination White men claiming their pay is less than women or protected class members doing the same work Case 1: Nebraska –created model for predicting pay –raised salaries of women but not men paid less than model –violation of EPA Case 2: Northern Illinois –one time pay adjustment for women, not permanent –no violation of EPA Case 3: Northwest Airlines –female flight attendants awarded back pay for sex discrimination –men argued they should receive back pay too –men won

11. EPA Summary Instructions: This is an embedded table from Microsoft Word. To edit this table you need to have Microsoft Word installed on your computer. You do not need to have Word installed to view the table. To edit this table simply double-click anywhere on the table. When you’re done editing the table, click outside of the table to return to PowerPoint. Pay system must have substantially equal pay for substantially equal work Work defined as actual work performed Skill, effort, responsibility & working conditions define work OK to pay women & men unequally if based upon performance or seniority

12. Title VII of Civil Rights Act, 1964 Instructions: This is an embedded graph. To edit this graph simply double- click anywhere on the graph. When you’re done editing the graph, click outside of the graph to return to PowerPoint. Forbids discrimination on the basis of sex, race, color, religion, or national origin in any employment condition –Disparate Treatment: practices which treat protected groups less favorably must have intent –Disparate Impact: a personnel policy which on its face is neutral but has the effect of discriminating intent not needed

13. Comparable Worth Instructions: These are embedded graphs. To edit a graph simply double-click anywhere on the graph. When you’re done editing the graph, click outside of the graph to return to PowerPoint. Labels above each column are added in PowerPoint. Comparison of the value of jobs -argues that jobs vary in pay because of historical discrimination -Arises from sex segregation of jobs Discrimination pervades entire employment relationship including pay

14. Comparable Worth: Legal Criteria is job evaluation Under Gunther pay discrimination can be from dissimilar jobs AFSCME v. Washington –State commissioned pay study showed female dominated jobs paid less than male dominated jobs –Did not adjust jobs based on study –Court said that they had to raise wages because of the study –Comparable worth argument supported Market data is an acceptable defense for dissimilar jobs

15. Title VII Summary Pay discrimination illegal if intent shown Pay discrimination also can be found using statistics (adverse impact) However, Comparable Worth & Job Evaluation studies do not demonstrate intent Title VII goes beyond equal jobs Market rates acceptable defense Comparable worth not upheld

16. Pay Differences Firm Differences Strategy Technology Size Ability to Pay Pay Policy Employee Differences Performance Absenteeism Turnover Work Differences Skill, effort, responsibility, working conditions Discrimination Labor Market Union Membership Employee Education Seniority Qualifications Pay Difference Explanations

17. Residual Approach to Explaining Discrimination Take all of the variables from previous slide Regress those for men & those for women If left unexplained, then discrimination

18. Scenario 2 Susan and Joe were hired as Accountant I in 1995 at $35,000. In 2002, Joe has been promoted to Accountant III and earns $65,000 and Sue is an Accountant II and earns $59,500. How would you ascertain if Sue is a victim of pay discrimination or if the firm is paying Sue fairly?

19. Pay Discrimination Summary Despite laws, pay differences still exist Discrimination? Personal choice? Other factors?