Here's what I think a big driver is (you're going to have to walk down premise lane with me as I don't want to spend the time on citations ATM): Presuming that women are in general more agreeable than man in the workplace and that they don't fight as hard and as often for raises, I would expect an otherwise equal male counterpart that is more aggressive to have higher pay. Why? Because the squeaky wheel gets the grease.
Every year when we did promotions we'd start out with a zero-sum raise pool. Let's say if everyone got exactly the same, they'd get 2%. But if I give Bob a raise of 4% I have to go 'take' that extra 2% from people or everyone. If I'm worried about Bob leaving, or he's asked for a raise and plead a good case, he's going to get it. If Alice or Charlie have been silent all year but have been doing an otherwise good job, they're going to get what's leftover- in general.
There have been a number of cases where we idtenified someone silently kick major ass and threw money at them, but that I think it is because we had very conscientious managers that worked closely with their subordinates, unlike BigCo.
I'm not even going to touch on all the other reasons that people have laid out as possible reasons why women tend to earn less. I think if you've got two people working well, doing the exact same job and producing the exact same outputs, they should be paid nearly equally, but we're humans and life is messy. Some people haggle better than others, some had a very low salary before that the new job used to baseline, etc.
If you really want to maximize your salary at an given job, argue for every last penny coming in. All future raises (for the most part) will be based off that number and it will haunt you for your entire tenure at the company- most likely.
Every year when we did promotions we'd start out with a
zero-sum raise pool.
If I'm an employee and I do some great work that brings the company an extra $X per annum, and I ask for a raise of $0.1X the company is welcome to take that out of the $X I made them.
If the company decides to instead take the $0.1X from someplace else, that's their decision not mine - claiming raises are zero-sum is just bullshit to make people feel guilty about asking for a raise.
There was no stack ranking or any other political BS. Here's your pool, do with it as you wish. So, if you ask me, zero sum sucks, but it at very least lets the person closest to the action get a chance to make a call.
It also prevented the managers from just handing out raises for no real reason. For example, you've got two people that have had great years and another that's just been treading water. If you give them the raise you want to, you're going to wind up with nothing left for the third. With an unlimited sum of money at your disposal you may kick that person a percent or two to prevent hurt feelings, now you've got to make the hard call.
Or, if that third person also had a good year and you want to fight for them, you can run it up the chain and shake out a few percent for them. It was always there for the asking if you felt like going through some effort to get it.
So yeah, there's better ways to do it, but it's also not completely awful either.
We can debate how that $X should be divided between workers, executives, creditors, shareholders and reinvestment. But there's no "financial reality" that means workers' share has to be zero.
Every organisation has rules and budgets and procedures, but they're made by people and if they don't work right they can be fixed by people. It's not like the CEO received the budget from God on stone tablets on a mountain 2000 years ago.
If I wanted to work in some calcified bureaucracy where rules were more important than outcomes and worker performance was irrelevant, I wouldn't be working in the private sector!
It's also highly unlikely that your singular effort created 10K more profit. That 10K was likely the culmination of a number of people who had varying levels of participation in the effort.
Unless you're working at a company that tracks your hours to every single possible project you're working on, there's often a huge blind spot as to where exactly your effort is going as it pertains to revenue. Unless your in professional services or some other type of billable position, then I actually agree with your notion to a degree...
With regards to people in billable positions, I once workthink d for a company that did something I really thought was neat. At the end of every quarter they'd announce a profit sharing rate based off of whatever it was that defined the rate. Since we were all billable this rate was at $X per billable hour. So if you billed more, you participated in a greater share of the revenue. I frequently saw $10-20K quarterly bonuses based entirely off my effort. It was quite motivating.
Because the profit sharing was the same rate for everyone and took in to account the entire company's financials, you were assured that your billable efforts were going to be rewarded on the same scale as the next person.
If you fly too close to the sun and your weekly pay directly relates to the value you put in that week you'd might have job security but you'd have absolutely no income security!
...and Alice and Charlie just find another job in a few years because their raises haven't been keeping up with market rates. It's not necessarily the direct managers' fault unless corporate gives:
* estimates of market rates
* recommendations that an average employee gets an X% raise to track with market rate (or even stay ahead of it)
* a big enough pile of money to compensate everyone in line with market rates
* even more money to reward high achievers (and probably squeaky wheels, too)
This seems like a tall order to most budget-makers, so instead wise employees change jobs every so often to make sure their salaries keep up with market rates.
If you like your colleagues and the work you do, leaving the company for a raise seems more aggressive than first telling your manager that you are unhappy with your pay.
If that were true, wouldn't the salaries start off the same and then diverge? Doesn't seem to quite match up with these unofficial numbers.
Besides, at most $MegaCorp, isn't compensation reviewed periodically, and some kind of peer review is included? Which means that agreeableness is less of a factor, which means the process is working.
If there existed statistics for such strategy, I wonder if it would have a gender attribute to it.
No, because starting salary is something that is negotiable, too. And you need to push back on the offer and ask for more if you want to make more. If you're not the type to push back, you start lower.
1. You approach a manager with expanded responsibilities that would justify more pay. Or a detailed account of your undocumented responsibilities that justify more pay. Don't come at me asking for more money for the same job if you're not already (or plan on) doing more work than we agreed to.
I went from Architect to Director this way.
2. You have another offer from another company and give your old company a chance to match. This could have ramifications that everyone goes around and around about. The general rule of thumb is not to do this, but if you believe in your current company, what you're doing them is informing them you're below market for YOU, and they've got an opportunity to fix that.
I did this at one company and it worked fine, but I left a year later anyway. There's some stats that say a large portion of people who do this are gone within a year.
I'm not a big fan of large companies, I don't think they can win. Even if you have good numbers, that doesn't fit the narrative of "Silicon Valley has established itself as the boys’ club". Say for example, we applauded companies who are doing better, maybe even close to statistical significance, then you could say, "Hey, it's still not quite there yet, but it's close and we're doing better than others. Come work for us and help us make it right." And then that would be actionable advice, and companies would have a great reason to strive for this. But we'd also have to be honest about statistical error rates, and maybe some other stuff.
I'll close on this, I've heard people say stupid and offensive shit when they're drunk, but never "Hey, let's pay women less", although I'm not an executive. So I feel like it isn't a common thought... unless you keep reading articles like this one.