27 September 2023

Naming and shaming doesn’t fix gender pay gaps

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Financy* says new research has debunked the belief that publicly shaming companies on pay will change employee

There is a school of thought used by policy-makers that naming shaming companies on gender pay gaps, is the answer to progress.

But new research suggests it might not be.

The idea behind naming and shaming on pay is that it should prompt company leaders to suddenly say, “oh crap we had better do something to change our performance on this otherwise it’s going to really hurt out brand image and worse, bottom line.”

But there has been very little research to prove that naming and shaming actually works.

Indeed a new study suggests that it’s not effective in changing employee attitudes, and that policy-makers may need to try a different tact to achieve long-term structural change.

In a recent publication in Administrative Science Quarterly, Amanda Sharkey, Elizabeth Pontikes, and Greta Hsu studied the effects of mandated publication of the gender pay gap in the United Kingdom.

Of their findings, organisations with pay parity received a temporary boost in employee evaluations when that information was made public.

But organisations with large pay gaps, received no negative response when their information was made public.

“Our analyses produce an unanticipated pattern of results.

We find little evidence that employees evaluated their employers more negatively if they disclosed significant gender-based wage disparities—a pattern that runs counter to the idea that naming and shaming offenders will push organizations to address gender inequality.

At the same time, we find evidence that mandatory wage gap disclosure in the U.K.

was followed by short-term (lasting approximately one month) improvements in employee ratings of organizations reporting a near-zero gender wage gap, consistent with a reputational boost,” the authors noted.

Three possible reasons have been given as to why naming and shaming doesn’t really work in affecting the way employees think and behave – as in walk out!

1. Not new information.

The study notes that changes to brand reputation often happen when key stakeholders, such as employees are surprised by the information.

But if they already know this information to be true, then naming or shaming won’t be effective.

2. Gender pay gaps can be explained.

The study also notes that although attitudes about women in the workplace have become significantly more egalitarian over time (Shu and Meagher, 2018), many still view gender pay gaps as able to be explained and therefore are acceptable or fair.

This might come as a shock to some, but it’s worth thinking about at your next gender pay gap debate!

3. Short-term impact.

The study also makes the point that bad headlines about such things like gender pay gap only have brand damage for as long as they are in the media.

Bad publicity seems to fade soon after, which would potentially provide an excuse out of making long-term structural changes.

*Financy creates and publishes a variety of content on women’s money matters.

This article first appeared at financy.com.au.

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