̽��ֱ�� of Cambridge - pay

Making the numbers count: supporting and engaging women at every career stage

ed515 — Fri, 15 Jun 2018 08:00:00 +0000

Glass ceilings, glass cliffs, glass escalators… much has been written about the metaphorical glass barrier that stands invisibly yet solidly between women and high-level success across the economy.

It’s a description that exasperates Professor Sucheta Nadkarni from Cambridge Judge Business School.

“ ̽��ֱ��challenges faced by women in business are well documented and fiercely debated, and there’s a tendency for most of this talk to be negative. I call this the doom and gloom narrative – it’s about the barriers that women face and why women fail. Let’s change the conversation about gender equality to focus on the factors that help women
to succeed.”

Nadkarni is the lead academic on a major global research project that reported in the European Business Review last year on the factors that help women to succeed in corporate environments. ̽��ֱ��project gathered data from 1,071 companies in 42 countries, covering 56 industries. ̽��ֱ��information spanned a ten-year period, during which the average percentage of women on executive teams in sampled firms rose from 7.6% to just 11.7%.

̽��ֱ��study highlighted the many benefits that women in senior roles bring to companies. “It’s not just that hiring more women into senior positions is the right thing to do for gender equality, it’s also the smart thing to do from a business perspective,” says Nadkarni.

“We found that bringing more women to top roles can make a business function better, attract new customers and improve the bottom line. Women bring in diverse capabilities, diverse knowledge and new ways of thinking, which organisations need.”

With revelations about the gender pay gap making current headlines – three quarters of the 10,000 firms that have provided information pay men more than women – the inequality problems women continue to face in the labour market are gaining increasing attention.

However, Nadkarni is keen to focus on the future. “ ̽��ֱ��question we need to ask now is: what can we do about this situation of unequal pay and unequal representation, and how can we create a more optimistic, promising picture for our students and for the women who are just starting to rise up?”

Her study considered the economic, political, legislative and cultural forces that determine the number of women in the boardroom in different countries. ̽��ֱ��findings showed that the strongest drivers are ‘female economic power’ and a requirement for gender diversity in a country’s corporate governance code. Maternity provisions and female politicians providing a championing voice for women are also important factors.

Female economic power was measured by the expected years of schooling for women, and the percentage of women in the labour force. ̽��ֱ��results suggest that as women become more highly educated, and gain increasing levels of employment, they play a greater role in the marketplace. This then provides a powerful incentive for companies to hire more women onto the board, to reflect the market they cater for.

Corporate governance codes are a set of best practice recommendations, including gender diversity requirements. In the past decade, codes have been created in 64 countries. Among countries sampled in Nadkarni’s study, Colombia had the highest percentage of women in executive teams, at 28.5%, and Japan ranked bottom with 0.57%.

These codes, says Nadkarni, are one example of a ‘soft’ measure that has been shown to be effective in helping women to gain top roles in executive teams or on management boards. In comparison, ‘hard’ targets – such as the mandatory quotas enforced on companies by several countries to give a percentage of seats on the board to women – do little to support gender diversity, and can also have a negative effect on company cohesion.

“Although quotas can help to improve the representation of women on corporate boards, they do little to help women stay in senior positions long enough to make a real impact, and can have both positive and negative effects on turnover rates,” says Nadkarni. “They can also create a hostile environment, by conveying a sense of ‘preferential treatment’ rather than recognition of hard work, skills and capabilities.”

̽��ֱ��research also uncovered some of the loopholes that companies exploit to meet quota requirements. For example, in countries where family businesses are common, quotas are sometimes fulfilled by appointing female relatives to the board. In one case, an 86-year-old, the daughter of the founder of a company in Turkey, had been on the board since 1964.

Dr Jude Browne, the Jessica and Peter Frankopan Director of the ̽��ֱ�� of Cambridge Centre for Gender Studies, has constructed a different approach to addressing gender equality that focuses on encouraging diversity at all levels of an organisation rather than simply quota requirements for senior roles.

Browne suggests that “each organisation with significant pay gaps and other segregation patterns needs to begin by building a detailed picture of what it thinks its data ought to look like and, crucially, publish its goals.

“Too many organisations simply collect data, compile aggregate figures that don’t tell us that much and then look to other organisations to see how they compare. Given that a great many are failing to pick up real pace in addressing these patterns, the ‘comparison with competitors approach’ tends to generate a complacent comfort zone around what ought to be, in many cases, unacceptable.”

As Browne set out at the European Commission recently, the ‘Critical Mass Marker’ approach focuses on skilled women who are not advancing to the next level as quickly as one might expect – that is, where critical mass is not having the desired flow effect.

̽��ֱ��approach requires an organisation to undertake a detailed analysis of its workforce and mark out goals that proportionately relate each level to the next, taking critical mass failures into particular account. Organisations would then be required to analyse and explain their continued segregation patterns against their published goals. This might include analysing the different career profiles that various intersectional groups tend to have and the impact of dependant-related responsibilities, reassessing the benchmark criteria for promotion, and comparing those who have worked within the organisation for long periods to newcomers with very different workloads.

“ ̽��ֱ��Critical Mass Marker approach is not going to solve all the segregation problems that organisations tend to have,” she adds. “But it puts a greater onus on them to ensure those equipped with the relevant talents are able to move up and across institutional structures in a more effective and proportionate way than blanket quotas aimed solely at the top layers of management where we often only see the same few women.”

Nadkarni is also keen to see more women supported at every level, and would like to see action to increase the number of women in executive teams, not just on corporate boards.

“Corporate boards are important, but they only play an indirect role in influencing company strategies and performance, because they mainly have an advisory capacity,” she says. “ ̽��ֱ��decisions are made by the executive team. So, if we want companies to benefit, if we want women to really make an impact, then it’s the executive teams that matter.

“In this context, a quote that comes to mind is it’s not about ‘counting the numbers’, it’s about ‘making the numbers count’. In other words, it’s not merely the quantity of women in top positions that matters, but also whether policies are in place at various levels – company, government and corporate governance codes – to ensure that women can make
a true impact in such roles.

“Hopefully in the future we will watch the doom and gloom ebb away as the true benefits of gender equality become crystal clear to everyone.”

Inset image: read more about our research on the topic of work in the ̽��ֱ��'s research magazine; download a pdf; view on Issuu.

Researchers call for gender equality and career support for women in the workplace, and an end to “the doom and gloom narrative” over their limited numbers.

Hiring more women into senior positions is the right thing to do for gender equality. It’s also the smart thing to do from a business perspective

Sucheta Nadkarni

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Flexible hours 'controlled by management' cause stress and damage home lives of low-paid workers

fpjl2 — Wed, 20 Apr 2016 09:37:31 +0000

A researcher who embedded himself in several London branches of one of the UK's largest supermarkets found that management used a combination of 'flexed-time' contracts and overtime to control worker shifts to meet times of anticipated demand, while ensuring costs are kept to a minimum.

Workers at the supermarket chain were frequently expected to extend or change shifts with little or no notice, often to the detriment of their home and family lives – causing the majority of workers interviewed to feel negatively about their jobs.

Low wages and lack of guaranteed hours, combined with convoluted contractual terms, weak union presence, and pressure from managers that at times bordered on coercion ("...there are plenty of people out there who need jobs") meant that many felt they had no choice but to work when ordered, despite the impact on childcare, work-life balance and, in some cases, health - both physical and mental.

Dr Alex Wood, who conducted the research while at Cambridge's Department of Sociology, has chosen not to name the retailer in the new study, published today in the journal Human Relations. Having spoken with union representatives from across the retail sector, however, Wood believes the practises he encountered are now endemic across major supermarkets in the UK.

̽��ֱ��Government's website describes flexible working as something that "suits an employee's needs". However, Wood says there is a critical distinction – one overlooked by the Department of Work and Pensions (DWP) – between workers controlling their own schedules, and management imposing control.

"Control over flexible working enables a better work-life balance. However, such control is the privilege of high-end workers. When low-paid, vulnerable workers experience flexible working time, it is at the whim of managers who alter schedules in order to maximise profits, with little consideration for the work-life balance of employees," said Wood.

̽��ֱ��practice of low core-hour contracts that can be 'flexed up' are most notoriously embodied in zero-hour contracts – recently reported to affect over 800,000 British workers. Last year, then DWP Minister Iain Duncan Smith held up a survey claiming to show "most" workers on such contracts find them to be beneficial.

Wood says this is an example of conflating low-end, hourly-paid workers who have schedules dictated by management - those in supermarkets, for example - with highly paid professionals such as consultants who control their own hours of work. While all are technically on zero-hours contracts, their experiences of work are dramatically different.

"It is misleading to claim that flexibility provided by zero-hour contracts is beneficial for 'most' workers' work-life balance, and it is simply implausible to suggest this is the case for low-paid, vulnerable workers who by definition lack the power to control their working time," said Wood, who contributed evidence to the coalition government's zero-hours policy review in 2014.

For the study, Wood conducted interviews with a number of workers from across four of the UK retailer's stores, ranging from check-out operators to online delivery drivers, as well as interviewing union reps and officials. He also conducted two months of "participatory observation": working as a shelf stacker in one of the larger supermarket stores.

His findings have led Wood to conclude that the problem of precarious contracts goes far beyond just zero-hours, encompassing most management-controlled flexible contracts.

At the time of the research, the UK retailer had a policy of new stores reserving 20% of all payroll costs for short-term changes in shifts, which requires around 45% of all staff to be on flexible contracts, says Wood, although interviews with union representatives indicated this was likely higher.

While contracted for as little as 7.5 core hours, all flexible workers had to provide 48 hours of availability per week at the point of application – with greater availability increasing the chances of being hired.

Officially, 'flexed' hours were not to exceed 60% of workers' core hours. However, despite being contracted for a weekly average of just nine core hours, Wood found that standard flexible workers were working an average of 36 hour weeks.

Management used combinations of 'overtime' – additional hours that are voluntary but can be offered on-the-spot – with 'flexed time' – additional hours that are compulsory but require 24 hours' notice – to ensure staffing levels could be manipulated at short notice to meet expected demand.

Both overtime and flexed time were paid at standard rates, keeping payroll costs down, and Wood found distinctions between the two were frequently blurred - disregarding what little contractual protection existed.

"In reality, the nature of low pay and low hours contracts means these workers can't afford to turn down hours," said Wood.

"Whether zero core hours, or seven, or nine - none provide enough to live on. This precarious situation of not having enough hours to make ends meet is heightened by a perception that refusal to work additional hours meant they would not be offered them again in future, something most workers simply couldn't afford."

̽��ֱ��stress caused by management-controlled flexed time of low hour contracts, and the impact on home and family lives, were frequently raised by the workers that Wood spoke to.

One worker provided what Wood describes as a "characteristic experience". Sara co-habited with her partner Paul, also employed at the UK retailer. "[W]e've set aside Saturday as a day to do something – me, Paul and my son – as a family... She [Sara's manager] now wants me to work Saturdays... it's all up in the air."

Colin, another worker, described the impact of dramatic schedule alterations to his wellbeing: "I had to change hours, or accept another position, or try another store... I felt really sick, it just hit me, it hit all of us..."

Asim, a union rep, made it clear that management bullying occurred: "People have been told, wrongly, that they can be sacked for it if they don't change their hours."

Under Duncan-Smith, the UK government legislated to ban 'exclusive' zero-hours contracts – those that have no guaranteed hours but restrict workers from getting another job – but Wood says this is simply a straw man, and new DWP Minister Stephen Crabb must go much further.

'It's imperative that Stephen Crabb breaks from his predecessor and recognises the damage which wider manager-controlled flexible scheduling practices, including all zero hours contracts, do to work-life balance," Wood said.

"Policies are needed which strengthen low-end workers' voice. When alterations to schedules are made solely by managers and driven by cost containment, flexibility is only beneficial for the employer not the employees."

Researcher Alex Wood calls on new DWP Minister Stephen Crabb to acknowledge distinction between flexible scheduling controlled by managers to maximise profit, damaging lives of the low-paid in the process, and high-end professionals who set their own schedules – an issue he says was publicly fudged by Ian Duncan-Smith to justify zero-hour contracts.

I had to change hours, or accept another position, or try another store... I felt really sick, it just hit me, it hit all of us...

Colin, worker at the unnamed supermarket

Tesco PLC

Tesco Linwood

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Following the money

sc604 — Fri, 25 Apr 2014 07:05:00 +0000

Pay for performance matters. It’s a practice that crosses sectors, affects millions of employees globally and regularly makes the headlines. But there’s a problem, says Dr Jonathan Trevor, Lecturer in Human Resources & Organisations and Co-Director of the Centre for International Human Resource Management (CIHRM). It might not work.

“Companies don’t like to talk about this,” he says. “But we need a debate on this issue, because pay for performance is widespread, and has become the dominant logic of employee reward – the notion that we can use pay as a carrot, or a stick, and drive positive employee behaviour. In reality, I believe pay is like plumbing. You only ever notice it when it goes wrong. It can be used in good or bad ways – but often it is the latter. It is often misused, or used inappropriately, as a crutch for poor leadership – especially in the financial sector.”

For five years, Dr Trevor acted as a retained academic advisor to ̽��ֱ��Remuneration Group, a consortium of senior remuneration directors working in FTSE 50 companies who met each year for a two-day round table and research exposition in Cambridge. As director of ConsultCambridge Ltd, he brings together the academic and business world to find new ways of applying theory to practice.

"It’s very much a two-way street,” he says. “We meet with extremely senior people from the UK’s most successful companies who work side-by-side with researchers to identify a research agenda. They, in turn, feed back from their own research and help the business leaders to understand what it means in their own context, and what they might do differently in terms of driving performance and, crucially, managing risk."

̽��ֱ��theory behind pay for performance is logical: it helps to establish a line of sight between the individual and their contribution to the organisation’s goals and purposes.

But when it goes bad, the consequences can be highly destructive. Dr Trevor points to the ongoing payment protection insurance (PPI) mis-selling scandal that has thus far cost banks £22.2 billion in compensation. Employees were given a financial incentive for each policy they sold. They were, indeed, highly motivated to sell more. But, says Dr Trevor, it didn’t work.

̽��ֱ��incentives in question drove a certain type of behaviour – aggressive sales at any cost. But that behaviour was not functional. It caused both reputational and financial harm and was ultimately counterproductive.

In the mis-selling scandal, the pay structures were relatively simple. But the other main problem with pay for performance, says Dr Trevor, is its complexity, a central theme of his book Can Pay Be Strategic? A Critical Exploration of Strategic Pay in Practice. ̽��ֱ��way we work is changing, and pay for performance is struggling to keep pace. Companies necessarily need to rely more and more upon the discretion of their people, as opposed to requiring them to simply follow, or perform against highly prescribed targets. In that context, pay for performance becomes vastly complicated and therefore less effective as a means of management control.

“Selling Mars bars is one thing,” says Dr Trevor. “Creating a market-changing innovation or technology is quite another. How do you incentivise someone in a research and development department when it might take 10 years for their work to bear any commercial benefit and when the actual innovation process is quite serendipitous?”

How indeed? Why might people work hard, if not for extra pay? Dr Trevor points out that, surprisingly, research shows that money consistently comes very low down the list of potential motivational factors. Although it’s often mentioned in exit interviews as the reason why someone leaves, more in-depth research shows that people don’t leave companies because of the money. (In fact, he says, they don’t leave companies at all. They leave managers.)

He cites three main motivators: “First: a common purpose. Does the company do meaningful work – and does the individual understand his or her role within it? Second: engaging work. Jobs can be constructed in such a way as to make them naturally engaging, challenging and have clear impact. And third: good management.

“ ̽��ֱ��by-product of these is that not only a more capable workforce, but actually they are naturally engaging processes. They can be more powerful than just simply an annual performance review and pay bump. And ultimately, the absence of those things cannot be made good by either paying people more, or paying people more aggressively.”

It’s still hard for companies to admit that new thinking is needed. But the numbers say that the conversation is changing. “If you look at trend statistics, many companies are actually moving away from pay for performance,” says Dr Trevor. “They are disconnecting performance management and pay – and realising that pay as a consequence to either good or poor performance is actually just disconnecting people from what performance management should be – an honest and forward looking conversation that connects the individual with the purpose of their employer.”

Does performance-related pay work? Dr Jonathan Trevor explores the issues.

Pay is often misused, or used inappropriately, as a crutch for poor leadership – especially in the financial sector

Jonathan Trevor

Bruce Thomson via flickr

Carrot and stick

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