A soon to be published research article in the Academy of Management Journal examines the effect of race and gender on customer satisfaction surveys.
From the main author’s (extremely informative) press release :
A research article set to appear in the flagship management journal, Academy of Management Journal, helps solve the puzzle of why women and minorities get paid 25 percent less than white men. The persistent wage gap is puzzling because managers should logically prefer to hire less costly women and minority workers, thereby driving up such workers’ wages. Although many assume that the wage gap persists because managers are biased in favor of white men, there is little research evidence supporting this hypothesis (managerial bias accounts for 1-2 percent of employee job performance ratings). The paper’s authors, who conducted their research from five North American business schools, found that customers are biased against women and minority employees, which means that managers have a significant financial incentive to pay women and minorities less.
A PDF of the complete article can be found here .
8 Comments
I haven’t finished reading the article yet (64 pages- ouch!), but there seems to be several graphics and tables missing within the first 25 pages (they are still included in the appendices) and the formatting is strange. I’m wondering if an incomplete copy was posted as the final..
The abstract (“disturbing evidence,” really? is this a peer-reviewed article or a news reel?) also leads me to believe this might not be a true final copy, but maybe it’s because I’m used to reading biology articles.
So basically, the argument is that the gap in the pay wage isn’t about employers being sexist or racist?
Even if it’s true that it is in fact the customers who are sexist and racist, doesn’t the fact that the employers are going to pay women and minorities less based on the customers’ sexism/racism also make the employers sexist and racist, even if only indirectly?
Well, how do the managers know? They usually just get complaints or customer reports. A manager will obviously ignore someone who is openly sexist and racist, but the article seemed to be implying more subtle bigotry; and if all the manager hears is a relatively normal complaint they won’t know for sure that that’s what’s going on; for all they know the person has a legitimate concern.
In general, the only ways a manager will get customer feedback are:
-complaints, which are ignored if they are sexist/racist but which are usually not so obvious
-customer surveys, which would not indicate WHY a customer felt the employee was subpar,
-sales, which have no obvious indication as to the reason– just Mr. WhiteMale sold $200 worth and Ms. LatinaFemale sold $150 worth, and
-direct observation, which would rule out the issue but doesn’t always happen, especially in larger businesses.
I think this one can’t be blamed on bosses.
I wonder how this fits with research that shows more ethnically/racially/gender diverse companies have better profits?
The statistics that shows that management employee discrimination accounts for 1-2% of cases may be off as it may go underreported.
Now that I’ve actually read (okay, glanced through) the paper, I have no idea how the press release is making the jump from “customer performance reviews are biased” (which I think the article explains clearly and reasonably with data) to “pay inequality”.
I want to see research proving this “significant financial incentive” to pay women and people of color less. It’s an assumption the authors seem to be making without reasonable back up. Future direction for research? Yes. Conclusion from theirs? No.
This doesn’t disprove manager bias, it shows that the systemic bias cannot be blamed on any one person or entity.
I wonder how this fits with research that shows more ethnically/racially/gender diverse companies have better profits?
I wouldn’t want to say it’s because they have lower overhead because they pay lower wages… When you put a statement like that under an article like this you get perverse conclusions.
We just need to teach women to assert themselves against unfair treatment. We have power.
I forgot to mention:
I heard about this from Robin Hanson’s blog who heard about it from The Washington Post.
Could you go talk some sense into Robin Hanson and his commenters for me? They seem to be in desperate need of a different perspective, one I don’t think I can provide by myself.