Among High-Potential Employees, Women Earn More than Men in Organizations with Diversity Goals, According to New Research from NYU Stern
Corporate diversity initiatives create a pay premium for women who are in – or are likely to reach – senior management positions.
This evidence may prompt a broader conversation within firms about gender equity and whether diversity value should play a role in compensation decisions.
Through extensive studies of high-potential female professionals at a Fortune 500 company and S&P 1500 organizations, Professor Leslie and her co-authors conclude that the widespread adoption of diversity initiatives by organizations has created a pay premium unique to women who currently hold – or are likely to reach – senior management positions.
Prior research has shown that, in Fortune 500 companies, women hold only 15 percent of executive positions and 8 percent of top earner positions compared to men.2 As a result, there is high demand for women with the potential to reach the upper echelons in organizations where diversity is a strategic goal.
In light of this, Professor Leslie and her co-authors reveal:
- Given short supply and high demand, organizations perceive high-potential women as more valuable than high-potential men for achieving their diversity goals.
- The resulting pay premium for high-potential women is larger in organizations where diversity initiatives are stronger.
- Diversity initiatives create a pay premium for a small subset of women deemed high potential, but they do not eliminate the pay penalty for other women.
The article, “Why and When Does the Gender Gap Reverse? Diversity Goals and the Pay Premium for High-Potential Women,” is forthcoming in the Academy of Management Journal.
To speak with Professor Leslie, please contact her directly at 212-998-0455 or firstname.lastname@example.org, or contact Jessica Neville in NYU Stern’s Office of Public Affairs at 416-516-7677, email@example.com, or Niamh Roberts at 212-998-0615 or firstname.lastname@example.org.
1 Arulampalam, W., Booth, A.L. & Bryan, M.L. 2007. Is there a glass ceiling over Europe? Exploring the gender pay gap across the wage distribution. Industrial and Labor Relations Review, 60: 163-186.
Blau, F.D & Kahn, L.M. 2007. The gender pay gap: Have women gone as far as they can? Academy of Management Perspectives, 21: 7-23.
2 Soarea, R., Bartkiewicz, M.J., Mulligan-Ferry, L., Fendler, E., & Kun, E.W.C. 2013b. 2013 Catalyst census Fortune 500 women executive officers and top earners. Catalyst.